Waiting for Yellen

8 February, 2016

The dollar reaction to US payrolls on Friday was relatively muted, given the shake-out seen in the middle of last week of dollar longs, but most managed to put the positive above the negatives, which was probably the best way to look at it. Earnings were firmer and the unemployment rate was lower, but with wider measures of slack remaining steady. What the price action of last week has done is to once again change the dynamics of the FX market. The yen has unwound all of the losses seen against the dollar in the wake of the BoJ’s move to move some interest rates into negative territory. It’s far less a question of the dollar vs. the rest of the world, merely because it’s supposedly in a tightening cycle whilst many others are facing in the opposite direction. As to what has replaced this mantra, for now it’s too early to tell.

For the week ahead, China celebrates its new year, so that should in theory put that story on the back-burner. Taking centre stage is likely to be Fed Chair Yellen as she testifies in her semi-annual monetary policy report on Wednesday and Thursday. Naturally, the change in pricing that has occurred so far this year, as compared to their projected rate path in December of last year, could well put her under some pressure on just how the Fed is now seeing the US and global economy. FX is likely to trade in a relatively muted fashion ahead of this, with no key data to distract. Commodities have also been on a more even keel of late, oil seemingly comfortable in the mid-30s level on the Brent active.


Source link  
Political Turmoil in Germany Hurts EUR

The EUR lost ground against many of its peers on Monday on news that Chancellor Angel Merkel’s efforts to form a coalition government had collapsed...

USD Suffers on Subpoena News

The Trump Administration is back in the spotlight with news of a report that Special counsel Robert Mueller’s investigators have issued a subpoena...

Positive data negated by tax plan opposition

The US Labor Department released data on Wednesday showing the consumer price index edged up by 0.1% in October after climbing by 0.5%...


Data Boosts EUR Can CPI Boost USD?

EUR received a boost on Tuesday, as data from Destatis showed German Preliminary GDP climbed to 0.8% in Q3, beating forecasts of 0.6%. In addition...

Chinese Data Disappoints

China’s economy has been robust throughout 2017 as a continued recovery in manufacturing and industrial sectors, a healthy property market...

Data & Polls Pressure Sterling

Sterling suffered downward pressure on Tuesday as the latest monthly report from the British Retail Consortium showed non-food sales slumping...


Closing the Year on a Strong Note

Data released on Monday indicates that the Eurozone economy is on target to close out 2017 strongly. The latest Markit composite PMI fell...

Sterling Falls on Rate Rise

In line with market expectations, the Bank of England raised the UK base rate to 0.5% (from 0.25%) on Thursday. The rise, the first in 10 years, was widely...

Another Political Headache for Trump

USD gave up some of its recent gains on news that investigators had charged President Trump’s former campaign manager regarding...

  


Share: