Replacing the dollar narrative

May 9, 2016

Friday’s US employment report failed to offer much in the way of resolving the current state of flux in FX markets. Expectations of further divergent monetary policy are not proving to be either a strong or reliable driver of currency markets. But as yet, there has not been a strong alternative narrative to replace it. Interest rate markets are still not convinced that we will see a further rate increase this year from the US Federal Reserve and currently we’d have to see a very strong pick-up in both activity and prices data for a move to be seen before the depths of the summer. Even the Brexit story on sterling has fallen by the wayside as a dominant driver of the currency, leaving sterling without a defining force going into the June referendum. This is despite the fact that the polls still continue to give only a slim advantage to the ‘remain’ campaign. That said, as we head into the last 6 weeks of campaigning we could well see this change as campaigning gears up.

UK PM Cameron is speaking this morning and sterling is weaker as we start the European session, back below the 1.44 level. Elsewhere, after the dollar’s recovery last week, we are seeing the commodity currencies as the weakest performers over this period, with naturally the Aussie leading the charger lower after the rate cut. The scope for lower rates remains for both the kiwi and Canadian dollar, so weakness could well persist for some time to come. Elsewhere, the data calendar is on the light side for today, whilst equities have managed a positive start to the session, despite the weakness seen in China.

Publication source
FxPro information  FxPro reviews

January 23, 2017
Japanese Yen is taking the heat
Looking at the daily chart of the Japanese Yen, we can see that the bullish engulfing has formed next to the 50% Fibonacci level, which has been broken on the weekly chart at the points of 125.853 and 98.935...
January 23, 2017
Main Macro Events This Week
President Trump has his feet under the desk in the Oval office and the tone of his inaugural speech and actions over the weekend reiterated his campaign themes to Make America Great Again...
January 23, 2017
UK stocks start the week on the back foot
The FTSE100 is under some selling pressure this morning and trading lower by around 40 points. The leading UK stock index posted its first weekly loss in over a month on Friday and has continued lower out the gate today. The pound is broadly higher on the day and has moved back above the 1.24 handle against the US dollar...

XTB Rating
 FXTM Rating
XM Rating
Tickmill Rating
Vantage FX Rating
Orbex Rating

TropicalTrade Rating
OptionBit Rating
OptionRally Rating
Porter Finance Rating
First Binary Option Service Rating
365BinaryOption Rating