Riskbank cut further into the red

11 February, 2016

Fed Chair Yellen faced something of an impossible task yesterday and the fact that the dollar is net-net little changed vs. levels prior to her testimony reflects that. Yes, the dollar did see some moves, but this was more down to position adjustment, with many having held back until the major event of the week was well under way. Ultimately, the Fed implicitly acknowledged that the outlook was less certain since the December tightening of rates, but was not willing to countenance the possibility of a reversal this year. But overall, as I suggested, the Fed is currently in a situation where it can do little to counteract the risk aversion in markets currently being seen.

As the world worries about the impact of negative interest rates, the Swedish Riskbank is the undoubted expert and has plunged their key rate further into negative territory this morning, cutting from -0.35% to -0.50%. The market was fairly split on the possibility of a move, so the Swedish Krone has reacted negatively in the wake of the decision, EURSEK moving to the 9.60 level in early trade. We’re also seeing the yen plunge further, through the 112.00 level, having been at 116.00 just 1 week ago. The BoJ’s move to negative rates (on proportion of reserves) looks a distant memory now, with the BoJ no doubt frustrated with the yen’s behaviour since that time. But the dollar is gaining against the Aussie and sterling in early European trade, reflecting the fact that the FX market has become more complex in its dynamics and the dollar is far from a simple risk or policy play. No key data releases for today beyond the usual US weekly claims data at 13:30 GMT.


Source link  
The precious metal has broken out

The precious metal has broken out from its descending wedge around 1331.00 and moved higher to create a lower high at 1361.80.The price then...

All Focus on US inflation data

The USD has weakened further overnight as the market awaits important US Data at 13:30 GMT. USDJPY broke down under 107.000, while...

Central Bank speakers start a quiet week

UK MPC Member Vlieghe spoke at the Resolution Foundation in London. Some of the comments made were: If there is less credit headwind to the UK economy...


Equities Face a Nervous Session

The global equity markets are bracing themselves for a stormy closing session this week, as data from Thomson Reuters Lipper unit shows US fund...

Super Thursday for the Bank of England

The Bank of England is expected to largely proceed as normal today on ‘Super Thursday’ when the central bank releases its policy decision and statement...

US Nonfarm Payrolls Today

Today is Non-farm Payrolls day in the US. This data release is generally one of the most important of the month, being a leading indicator of consumer...


Australian Dollar drops after soft data

The Australian dollar eased on Thursday following weaker-than-expected economic data. The Australian Dollar took an initial knock on Wednesday on...

Trump Supports a Strong Dollar

Markets have had a volatile session this week thanks to various US officials and yesterday was no exception, with President Trump speaking in Davos...

A Weaker Dollar is Good for the US

Yesterday, Senior US Officials took the lead from their President and made clear the US position on Trade. Commerce Secretary Wilbur Ross...

  


Share: