Shaping up for a volatile dollar

1 September, 2016

We enter a new month and it’s a month that is going to be pivotal for the dollar. The greenback has been clawing away at the prospect of a further rate increase from the Fed and tomorrow’s employment report could well determine whether the Fed has the ammunition to move rates higher later this month. Certainly, the message from Fed officials has largely reflected an intention to increase rates, but not going as far as a commitment. The Fed has probably wrong-footed the market once too often on that front, hence we have not had the level of forward guidance seen in the past. This sets up the dollar for a potentially choppy few weeks ahead.

Before then, the overnight session has seen better than expected PMI data in China, with the manufacturing series back above the 50.0 level at 50.4, from 49.9 in the previous month. Currencies have been held to a relatively narrow range, with the Korean won the main moving and weakening around 0.5% on disappointing current account data. The yen has stabilised somewhat after the weakening seen over recent sessions, whilst EURJPY is struggling for a sustained move above the 115 level. The China data gave a modest lift to the Aussie, AUDUSD bottoming out yesterday just below the 0.75 level.

For today, the focus will be on the final PMI data seen in both the UK, Europe and also the US, together with ISM manufacturing data at 14:00 GMT. We’re likely to see greater scrutiny of UK data over the coming month as the dust settles from the Brexit vote.


Source link  
Markets listen to Yellen & Draghi

Central Banks are the key drivers of the markets this week as traders focused on comments made from two major central bankers ECB and Fed...

Markets look ahead to US data

Trading in USD was relatively flat on Friday ahead of economic indicators released next week in the US, which will provide...

Bear Territory for Oil?

Oil continued to trade lower on Thursday as traders look ready to test new lows for crude prices with worries persisting over a global glut...


USD Rises as Investor Concerns Abated

Investor concerns, that low US inflation could deter the Federal Reserve from raising interest rates further this year...

How will FOMC Affect USD?

The crucial US retail sales and inflation figures for May will be released at 13:30 BST today...

Different Election Outcomes

In terms of the UK general election, there are 650 seats in total in the House of Commons. To become a majorityþ..


Seats Forecasts Weigh on GBP

Per the latest poll of polls released yesterday May 31, conducted by the Press Association based on...

Could USD Rebound?

The FOMC released its May meeting minutes last evening stating that the overall economic assessment was little changed...

Eyes on US Retail Sales

Friday May 12th will see the release of a set of crucial US data for April at 13:30 BST; retail sales, retail sales excluding autos, CPI and core CPI....

  


Share: