21/ 02/ 2018

Carney, FOMC Minutes and PMI's to Drive the GBP, USD and EUR

The U.S. Dollar closed higher against a basket of currencies yesterday, attempting pull away from three-year lows set last week as traders trimmed some of their bearish bets against the U.S. currency. Investors were also reacting to higher U.S. Treasury yields which made the dollar a more attractive investment. Inflation concerns continue to be the primary suspect in the recent uptick in yields, with wage and inflation data sparking volatility in equity markets worldwide over the past few weeks.

Looking ahead, the economic calendar is particularly busy today, with private sector PMI’s out of the Eurozone and the U.S, the UK inflation report hearings and the release of the FOMC meeting minutes scheduled for release. While the Dollar has been on the rise, much will depend on the minutes and how many doves are left in the camp.

20/ 02/ 2018

The Greenback makes a comeback

The greenback edged marginally higher on a dull Monday, with multiple holidays keeping volumes at their minimum. A follow-through US Dollar recovery, further supported by rising US Treasury bond yields, was seen as one of the key factors weighing on the major.

Markets now look forward to the German/composite Euro-area ZEW Economic Sentiment Survey for some fresh impetus. While focus would be on German political development, where SPD members begin voting on whether to enter another grand coalition under Chancellor Angela Merkel.

19/ 02/ 2018

Week Ahead | Central Banks to drive the market

The US dollar had a volatile week, making a big negative turnaround on the inflation report but moving back up as the week drew to a close. US inflation came out slightly higher than expected, the initial reaction was dollar positive, but the greenback fell back down as stocks turned positive and the narrative changed, partly due to the disappointing retail sales report. If the US economy is growing at a slower pace, there is no urge for a rate hike. The greenback made a comeback on Friday on profit taking and also upbeat figures from the housing sector and consumer confidence.

Looking ahead of the week, three major central banks detailing their most recent monetary policy meetings. These reports will provide important clues as to the central banks’ monetary policy stances, potential interest rate, and outlooks on inflation and economic growth. From US, FOMC minutes and several Fed speakers will have the chance to move markets.

15/ 02/ 2018

Dollar met its crisis at the hands of a negative Retail Sales

Dollar met its crisis at the hands of a negative Retail Sales report which turned the positive tide against all major currencies. Even though US Inflation figures were far better than expected, the negative Retail Sales meant that dollar gains were short lived. Euro and Pound took full benefit from the dollar decline as both currencies rose more than 1% against dollar.

There will be plenty more US data again today with the release of Initial and Continuing jobless claims. These data will be the main driver today, and if the data is weak then we can probably expect the dollar to come under further downside pressure.