Groundhog Year?

28 July, 2016

The Fed statement gave the briefest of lifts to the dollar, but this proved to be short-lived. The statement had the near-term risks to the outlook as being diminished and one member voting for higher rates (George). There has been some talk of a rate hike as early as September, but the market is not yet pricing that in, with only around a 25% probability of a hike in the September meeting. Still, we will have to watch the data and rhetoric carefully in the run up. The Fed has been caught out once too often in leading market down the wrong garden path and would be well-advised not to do the same again.

The single currency has benefited in the past two sessions, moving above the 1.11 level in early European trade. This is probably more a move by default, meaning more to do with the unattractiveness of other currencies, rather than the attractiveness of the euro itself. EURJPY has bounced off the 115.00 level as a result of the better euro tone and this level will be worth watching ahead of the BoJ meeting overnight, where expectations are for the BoJ to deliver further stimulus on top of the fiscal stimulus already promised. The yen has been on something of a roller-coaster over the past few days, between the 104.00 to 107.50 levels on USDJPY.

For today, it feels like we are going to freewheel into the end of the week. The impending BoJ meeting gives sufficient reason to hold back, whilst stocks appear to have run out of steam, having pulled back from the recent highs. The data calendar is restricted to German inflation data at 12:00 GMT, together with the usual weekly claims data in the US.


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: