18/ 07/ 2018

UK Inflation to Drive the GBP, with Trump and Powell to Direct the USD

The dollar rose since yesterday climbing to a six-month high against the yen today, as Federal Reserve Chairman Jerome Powell provided an upbeat assessment on the U.S. economy while downplaying the impact of current global trade policy discussions on the outlook for further monetary tightening. Investors were watching Powell's comments on global trade for any hint that it may slow the pace of interest rate increases. When Powell did not dwell on global trade, analysts said that was a green light to buy U.S. dollars.

Looking ahead, it’s another important day on the economic calendar, with June’s inflation figures scheduled for release from UK. Across the Pond, economic data out of the U.S is limited to June housing data numbers, with building permits and housing starts scheduled for release. While upbeat numbers tend to be Dollar positive, the housing sector reflective of economic conditions, FED Chair Powell and President Trump will likely remain the main areas of focus.

17/ 07/ 2018

Fed Powell's Testimony puts the USD in the Spotlight

Wall Street, European Stocks Edge Lower Ahead of Trump-Putin Summit in Helsinki. Global stocks weakened Monday, with investors adopting a cautious stance to trading ahead of a today's summit in Helsinki between U.S. President Donald Trump and Russian President Vladimir Putin and in the wake of a weaker-than-expected data from China that suggest growth in the world's second-largest economy is set to slow into the second half of the year.

President Trump Tweeted early Monday that U.S.-Russian relations had never been worse, thanks to what he continues to call a biased investigation into allegations that Moscow successfully meddled in the 2016 election, that latest of which produced the indictment of 12 Russians accused of hacking into emails held on the server of the Democratic National Committee

Today Asian stocks sagged, weighed by a sharp decline in crude oil prices as Libyan ports reopened, while the dollar steadied ahead of Federal Reserve Chairman Jerome Powell’s first congressional testimony. Asian stocks sagged on Tuesday, weighed by a sharp decline in crude oil prices as Libyan ports reopened, while the dollar steadied ahead of Federal Reserve Chairman Jerome Powell’s first congressional testimony.

16/ 07/ 2018

Week Ahead | Geo-political risks will continue to drive the market

The US Dollar was on a roll, taking advantage of trade wars and an upbeat economy. The US is moving forward with preparing new tariffs on $200 billion worth of Chinese goods. On the other hand, China and the US may enter negotiations. The news sent risk currencies lower and eventually hit other currencies as well. USD/JPY made a big break higher as stock markets outside China weathered the storm. The greenback also enjoyed rising inflation, with Core CPI reaching 2.3% as expected. Powell said he “sleeps well at night” when referring to the economy also helped. The ECB’s meeting minutes were dovish, and the UK saw a political drama. While the UK government opted for a softer version of Brexit, the divisions within the cabinet resulted in the resignations of Boris Johnson and David Davis, two key ministers. The Bank of Canada raised rates and signaled it would do more. However, they are concerned about trade.

Looking the upcoming week features a testimony by Fed Chair Powell with US retail sales figure and a meeting between Trump and Putin which is the key drivers through the session.

12/ 07/ 2018

Dollar holds firm against yen, major peers on strong U.S. inflation

The U.S. dollar strengthened against the Japanese yen on Wednesday as trade tensions mounted and after the Labor Department's expectation-beating inflation report, which increased prospects that the Federal Reserve will raise interest rates another two times this year.On Wednesday, nervousness in broader currency markets over an escalation in the U.S.-China trade war was slightly more contained than in equity markets, where there were hefty falls globally after Washington threatened 10 percent tariffs on $200 billion worth of Chinese imports."If that continues to escalate, not only the U.S. will be hit on a macro-economic level, but China's macro-economy, and countries with macro-economic ties to China, will be impacted as well."

Markets will continue to focus on the escalating US-China trade war but looking ahead, economic data is back in focus Thursday, with reports from Europe and the United States set to headline an active newswire. Investors will also get a small dose of monetary policy speculation in the form of ECB meeting minutes and a Federal Reserve speaker.