18/ 01/ 2018

Euro Inflation Meets Expectations, Pound Gains on Brexit Consideration, USD on Slide

The Euro has come off its highs against the U.S Dollar and is below 1.22. Inflation data from the European Union met its target yesterday, which sets traders up for next week’s European Central Bank pronouncements. The Pound was stronger, however, yesterday, as some British politicians suggested a softer approach to the Brexit is possible. European equities continued to produce selling on Wednesday.

The U.S Dollar continues to struggle for direction, with Dollar giving back some of Wednesday’s gains ahead today’s data that is forecasted to be Dollar negative with the Jobless Claims released from US.

17/ 01/ 2018

USD and EUR being watched, with BOC in Focus

It’s been a wild 24-hours for the U.S. Dollar. On Tuesday, the dollar posted an inside day against a basket of major currencies. The Euro, which tends to control the direction of the dollar index, posted a similar more. The expected volatility returned early today when the greenback fell to a three-year low against its counterparts. The spike to the downside was fueled by the Euro’s spike to the upside as investors shook of a setback to Chancellor Angela Merkel’s chances of forging a “grand coalition” in Germany.

The markets looking ahead to the Bank of Canada’s interest rate decision, Eurozone CPI final is the main feature in European session. US will release industrial production, NAHB housing index and Fed's Beige Book economic report later today.

16/ 01/ 2018

Inflation and the GBP in Focus as the USD Steadies from Monday’s Tumble

Dollar continues to trade as the weakest major currency as another week starts. Over the month, the greenback is trading weakest against Kiwi and Aussie. Meanwhile, Euro is catching up as Germany is closer to reforming the grand coalition. Sterling follows on improving prospects of a favorable Brexit deal. For the moment, it's unclear which is the main driving force behind Dollar's selloff. The fact that other global central banks are catching up on tightening is a factor. Surge in commodity prices is another one. But these two factors are not strong enough to send the Dollar index to three years low. The concerns of China's consideration to move away from Dollar assets could be the more important reason.

Looking ahead, pressure remains on the Dollar, with UK inflation figures in focus this morning, as the markets look for any signs of the BoE needing to rate hikes again this year.

15/ 01/ 2018

Week Ahead | Monetary Policy Outlook Going Against the USD, with the EUR on the Move

In the second week of New Year also the U.S. dollar continued to struggle against most major currencies around the world.

The U.S. dollar came under pressure after a report said that China will likely slow/halt buying U.S. Treasuries. A half-denial enabled the greenback to gain some ground, but the damage was already done, especially with respect to the Japanese yen. The USD/JPY pair experienced what is known as the “mini taper tantrum” from the Bank of Japan. The unimpressive inflation data didn’t provide any kind of support. Meanwhile, the euro gained because of the upbeat minutes of the meeting report released by the European Central Bank. The pound continued to remain stable in spite of worrying U.K. economic data.

Looking ahead of the week, the currency focus for the week ahead, therefore, will remain on both the beleaguered US dollar and exceptionally buoyant euro, as well as the Canadian dollar due to the potentially pivotal rate decision from the Bank of Canada.