28/ 03/ 2018

Can the Dollar Consolidate with GDP Figures?

There was some volatility seen yesterday, but as dusts settled, Euro is staying as the strongest one for the week, followed by Sterling. On the other hand, Yen and Dollar are trading as the weakest ones, followed not too far away by Australian Dollar. Political developments moved the currencies while the Euro zone economic sentiment was weak. As liquidity continues to drop ahead of Easter holidays, we might see more volatility ahead.

The EUR, GBP traders gear up for another light session ahead with the German Gfk consumer climate figures due on the cards in the European session. The main markets moving event for today is expected to be the US GDP data along with other macro releases, including the goods trade balance, pending home sales and EIA crude inventories report.

27/ 03/ 2018

Trade Tensions Ease as Negotiation Initiated

The financial markets responded positively to news that US and China are back on the table for trade negotiation. At least for now, the fear of further escalation in tension is eased. In the currency markets, Euro and Sterling are the strongest ones thanks to yesterday’s rally. Sterling rose against the dollar on Monday as investors became more convinced that the Bank of England would raise the interest rate in May. Euro was also strengthened as optimism that the US and China are set to begin negotiation on trade help ease fears of a trade war and investors’ appetite for risk improved. 

Looking ahead, euro traders will look into confidence indicators to be released. Also, US consumer confidence will be a feature of the day.

25/ 03/ 2018

Week Ahead | Tensions between China and the US to retain center stage

The U.S. Dollar fell against a basket of currencies last week, driven lower by a less-hawkish U.S. Federal Reserve and fears of a trade war after President Trump announced he would initiate sanctions against China.

The Fed raised rates as expected but did not change the dot-plot forecast for 2018, leaving two more rate hikes on the cards this year. On the trade front, the Administration approved exemptions to Europe, Canada, Mexico, Australia and several other countries and turned its attention to China. The greenback continued struggling especially against the yen and not so much against the Australian dollar. The pound enjoyed the announcement of transition Brexit deal, even though there are a few holes in it. The euro was relatively steady as the dollar’s weakness was countered by fears that euro-zone growth has peaked.

In a comparatively light pre-holiday week ahead in terms of economic data and events such as US, UK, and Canadian GDP as well as other figures , political concerns and trade war fears should continue to take center stage for both currency markets and equity investors. Any further escalation of the trade conflict between the US and China could place renewed pressure on both stocks and the dollar, whereas any dissipation of tension due to negotiations could prompt relief rallies.

22/ 03/ 2018

Dollar Tumbles After a Dovish FED Statement

The U.S. Dollar tumbled against a basket of currencies yesterday despite a 25 basis point rate hike from the Federal Reserve as the Fed 'dot plot' showed at a total of 3 rate hikes this year as opposed to previous forecast of 4. The sterling rose against the U.S. Dollar after data showed U.K. wages grew at their fastest pace in more than two years. With this news, speculators increased bets that the Bank of England would raise interest rates as early as May.

Looking ahead, all eyes will be on the UK retail sales data, as it will hold the key for the Bank of England’s Monetary Policy Committee vote decision on the official bank rate. The BOE monetary policy decision will be announced, which will be accompanied by its minutes and summary of the policy statement.