U.S. dollar on the defensive

14 September, 2016

Global equity markets received a boost on Tuesday after remarks from Fed governor Lael Brainard lowered the odds of an imminent rate hike when the Federal Reserve meets next week. Markets were anxiously awaiting Brainards’ comments to see whether recent economic data were was sufficient to turn one of the most dovish members into a hawk, but she made it clear that there are a’s number of factors to be taken into consideration before pulling the trigger on hiking rates such as the absence of accelerating inflationary pressures and risk from abroad.

Fed officials who were trying so hard to prepare markets for tightening monetary policy as early as September are now being ignored, as future traders are pricing in just a 15% chance for a hike in September down from 28% before Ms. Brainard spoke.

Although delaying a rate hike might continue to provide some artificial support to equity markets I still believe that valuations are high and aren’t supported by economic fundamentals or corporate earnings. When looking at last Friday’s price action, all major U.S. indices dropped by more than 2%., Wwhile gold and U.S. 2-years treasury bonds, which are supposed to be more sensitive asset classes to changes in monetary policy, just fell slightly. This indicates that we are likely to enter a phase of sharp volatility heading into fourth quarter, with risks tilted to the downside.ВВ 

The greenback traded slightly lower against most of its major peers on Monday but remained in a relatively tight range today. Today’s UK inflation data is likely to provide some price action on the pound with August CPI expected to reach its highest level since December 2014 at 0.7%. But the more interesting release this time is from PPI’s input prices which is forecasted to show a huge spike of 8.1% in August compared to 4.3% in July, making the case harder for BoE to continue loosening monetary policy when the central bank meets on Thursday.


Source link  
Equity investors doubting trade truce

The relief rally led by the US-China trade war truce didn't last long. Investors in Asia were seen taking profits from Monday's bounce in equities...

Global markets surge on trade truce hopes

Optimism over the temporary trade truce announced between the United States and China after the G-20 summit in Argentina last weekend has played...

Fed commitment supports Greenback

Reinforced expectations over higher interest rates in the United States after the Federal Reserve provided a consistent narrative that policymakers...


Rupiah manages to withstand Dollar drive

Improved risk appetite and an improved attitude towards global stock markets have helped support a number of different APAC EM currencies...

Equity sell-off resumes in Asia

The steep sell-off in U.S. equity markets suggests October could be the worst month since the global financial crisis of 2008. Seven trillion...

Sea of red across global equity markets

October has been a terrible month for equity investors so far. The S&P 500 and Dow Jones Industrial Average fell into negative territory for the year...


Italian budget, ECB meeting, US GDP

Asian shares were mostly higher this morning as Chinese indexes rallied more than 4% on verbal support from the country's top officials. Although the positive...

Yuan approaches critical level

The trading week kicked off with a panicked sell-off in Chinese equities which simply expresses growing fears in financial markets. Rising U.S...

Gold shines on Italy turmoil

Gold is poised to remain in the limelight this week after aggressively appreciating roughly $18 in a three-hour window. The yellow metal surprised markets...


In the past 24 hours Bitcoin has gained 6.69% and reached $3757.88356066. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.0395% and is now at $1.1371. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 13.56% and is now at $102.308240636. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Daily Forex Market Reviews


Forex Currencies Forecasts


Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets92%
2FXTMFXTM88%
3HYCMHYCM87%
4Alfa-ForexAlfa-Forex86%
5FxProFxPro85%
6FIBO GroupFIBO Group84%
7OctaFXOctaFX83%
8HotForexHotForex82%
9AvaTradeAvaTrade80%
10FXCMFXCM78%
  


Share: