02/ 05/ 2019

Market's Focus Turns to UK Interest Rate Decision while Dollar Stumble on Dovish Fed Statement

The dollar took a break on Asian markets since yesterday evening after recovering from a brief spill overnight when markets were whipsawed by mixed messages on policy from the Federal Reserve. The dollar had taken an initial knock from a surprisingly sharp retreat in the ISM index of manufacturing to 52.8, which overshadowed a strong ADP report on hiring.

Dollar fell further when Federal Reserve downsized its inflationary forecasts and after Fed Chair Jerome Powell talked down the chance of a rate cut.  

Focus will turn to BoE Super Thursday first BoE as UK local elections will put the Pound in focus. Stats out of the Eurozone and the U.S and trade talks will also need to be considered. But traders could have to wait for Friday’s non-farm payroll for the bigger moves which is a deciding factor for their future interest rate decisions.

01/ 05/ 2019

Market Slowdown ahead of UK & US Interest Rate Decision

Euro surges broadly yesterday as boosted a series of better than expected economic data. GDP beat market expectations and argue that the slowdown wasn’t as worse as expected. In particular, strength was also seen in problematic countries like Italy and Spain. Unemployment rate dropped to lowest in more than a decade. Inflation could also be coming back as German CPI accelerated much more than expected.

Nevertheless, Euro was just the second strongest, following Sterling, that had fallen to a two-and-a-half-month low since last week as the dollar surged and worries mounted about a deadlock in talks over the terms of Britain’s exit from the European Union.  The EU hopes Britain’s two biggest political parties will reach agreement on Brexit this week, possibly including membership in a customs union, the EU’s chief Brexit negotiator said.

The Pound could been lifted by “talks” that Prime Minister Theresa May is targeting to conclude Brexit negotiation with Labour by mid next week. 

With a number of the major markets closed,  the main event of the day will be the FOMC monetary policy decision, however. While there’s no expectation of a shift in policy, the FOMC statement will garner plenty of attention.

30/ 04/ 2019

Dollar Slips against Rivals on Speculation of Fed Rate Hikes tomorrow

All eyes are on the Fed to see what they made of the first-quarter gross domestic product report, which showed strong growth of 3.2 percent, but largely for one-off reasons including a surge in inventories.

A major hurdle for the dollar remains the Federal Reserve’s two-day policy meeting which ends on Wednesday with a statement and a news conference by Chairman Jerome Powell.

The central bank will have a monetary policy meeting Wednesday, which, by the way, will be a holiday elsewhere, as most of the world celebrates Labor Day. At the beginning of the week, the EU will also release GDP for the Euro Zone. The European Central Bank is under pressure to keep its stimulus in place, if not to do a new rounds. Today’s focus will be around Euro GDP & Germany Harmonized Index & US Consumer Confidence.

28/ 04/ 2019

Week Ahead | FED & BOE Interest Rate Hikes Take Center Stage

Markets gradually woke up after Easter and then rocked on the release of US GDP. The Dollar was on a tear through the week, with a shift in sentiment towards monetary policy providing support. Economic data out of the Eurozone continued to disappoint, while a combination of decent earnings and positive economic data supported the Dollar revival. There was a narrowing, despite the economic data out of the U.S at the end of the week. In spite of the narrowing, however, the spread remained supported by the view that the FED may be able to avoid a rate cut until later in the year.

The dollar fell against a basket of currencies on Friday, snapping a three-day streak of gains, after an overall strong U.S. first-quarter growth report was overshadowed by soft inflation data. US Gross domestic product increased at a 3.2 percent annualized rate in the quarter, the Commerce Department said in its advance GDP report, released on Friday. The dollar, however, did not enjoy a boost from the report as traders focused on the core personal expenditures consumption price index figure, the Federal Reserve’s preferred inflation gauge, which increased at only a 1.3% rate versus 1.8% in the prior quarter.

The economic calendar is packed, action will be in full swing in the upcoming week with the Fed decision, the BOE’s Super Thursday, Non-Farm Payrolls and Brexit and U.S – China trade talks resume.