13/ 12/ 2017

“Janet Yellen's last Fed meeting”

The FX market got in motion this Tuesday, with the greenback standing victorious ahead of Fed's monetary policy announcement. Euro Declined against the dollar as the dollar strengthened as the Federal Reserve began a two-day policy meeting where it is widely expected to raise interest rates for the fifth time since 2015. Investors will be watching for any signals that Fed officials are more optimistic on the prospect of faster growth as lawmakers appear close to passing a large overhaul of tax code of clues on how many further rate increase are likely next year. Meanwhile, sterling declined against the dollar yesterday as the stronger dollar offset upbeat UK economic data.

The day ahead could be a big one on that front. If the FOMC hikes rates and delivers some hawkish hints, along with a stimulative tax package, it could clear the way for a dollar rally into year end. Before then, some reports from UK and Europe will be released.

12/ 12/ 2017

UK Inflation data to drive the Pound as market awaits for FOMC Meeting

The U.S. Dollar traded both sides of the previous close against a basket of currencies on Monday before settling lower. The trade could best be described as lackluster with low volume and low volatility highlighted. Most of the major players were on the sidelines awaiting Wednesday’s U.S. Federal Reserve interest rate and monetary policy decisions.

Economic data out of the Eurozone this morning includes French nonfarm payrolls, together with December ZEW economic sentiment figures out of Germany and the Eurozone. For the Pound, November inflation figures will be one of the key drivers through the day. Across the Pond, it’s a relative quiet day on the data front, with stats limited to November producer price index numbers out of the U.S. While we will expect the Dollar to respond to the figures, focus will remain on tomorrow’s FOMC interest rate decision, economic projections and press conference, with a rate hike now largely baked into the Dollar.

11/ 12/ 2017

Week Ahead | Central Banks in Focus

Dollar ended the week as the strongest major currency on optimism that Republicans are on track to get the tax bill passed by the end of the year. However, there was certain indecisiveness in Dollar's rally. In particular, the greenback lost momentum as wage growth in non-farm payroll report disappointed. That added to concerns of lack on inflationary pressure, and thus could slow down Fed's tightening pace. But there are two sides of every coin as the greenback just lost momentum, but not reversed. Dollar will look into this week's FOMC rate hike and economic projections for guidance. Meanwhile, Sterling ended as the second strongest one as after a lot of drama, there was finally a breakthrough in Brexit negotiation. The EU summit on December 14/15 will now be formality only. The negotiation teams got the approval for moving to the next phase of trade talks already.

Four central banks will meet this week, including Fed, SNB, ECB and BoE. FOMC will be the major focus and the other three will likely be non-events.

07/ 12/ 2017

Will Draghi Put a Stop to Euro Sell Off?

Euro edged lower against the Dollar on Wednesday as the Dollar Strengthened on optimism about progress on US Tax Legislation and lawmakers efforts to avert a US Government shutdown on Saturday. Republicans hope to approve a final bill and deliver it to the President Donald Trump before Christmas. If this succeeds this will be the first major US Tax overhaul in 31 years and the first big republican legislative victory since trump took office.

Today’s focus will be on ECB President Draghi as he is scheduled to attend a press conference in Frankfurt at the Bank for International Settlements. Furthermore Euro zone GDP and US Initial jobless claims will have a say as well.