27/ 11/ 2017

Week Ahead | A Weaker Dollar

The dollar fell to its lowest level since mid-October against a basket of the other major currencies on Friday as euro zone data pointed to solid growth, while concerns lingered over the sluggish rate of U.S. inflation. The Fed seems to be less confident as regards inflation now. Yellen expressed it in her speeches and the FOMC minutes also pointed out the same.

The euro gained from upbeat PMI data and the hope that Germany will be able to resolve the political crisis that pulled the euro down a week before. The pound gained on hopes that the U.K. will accept the demands put forward by the EU on the Brexit bill.

The upcoming week is a busy one with US housing data, Inflation data, and GDP update which will be key for US to make a comeback.

23/ 11/ 2017

Dollar falls on weak U.S. data and Dovish FOMC Minutes

The greenback dropped across the board after release of dovish Fed minutes and Weak US data. Earlier on Wednesday morning, dollar was on the back foot as Fed Chair Yellen's speech sounded uncertain about the pace of U.S. inflation. December hike is still the base case but there might be growing doubts on whether there will be three more hikes next year. Euro closely follow Dollar as the second weakest on political uncertainties in Germany.  Besides the FOMC minutes catalyst, the Euro is getting a bonus bounce from reports that the EU and UK will come to terms with the Brexit divorce bill. Meanwhile, commodity currencies are supported by this week's rebound in commodity prices.

US and Japan will be closed due to Thanksgiving Holiday. Heading into Europe, we have plenty of risk events, which will keep the EUR, GBP traders busy. The German final GDP report will be released in early Europe, followed by the Euro area flash manufacturing PMI releases due out in the European session. Focus also remains on the second readout of the UK Q3 GDP and CBI realized sales data. Meanwhile, the ECB monetary policy meeting account will hog the limelight later today, especially after yesterday’s dovish FOMC minutes release.

22/ 11/ 2017

Dollar yet under pressure ahead of FOMC Minutes

Due to political uncertainty in Germany, as well as hopes for progress in the Brexit process and market anticipation for the upcoming UK Autumn Budget, the Euro and Pound has shed much of its recent gains.

US dollar had a strong start to Tuesday but lost some of its gains after the Fed Chair Yellen raised doubts over weak inflation. Also, a fresh WSJ report cited that Robert Mueller's investigators probed Kushner’s interactions with foreign leaders, extended the US political saga, weighing down on Treasury yields and the Greenback.

Todays Focus will be on UK Autumn Forecast Statement, US Durable Goods, Jobless Claims Data and Fed minutes. It is unlikely that the minutes will change expectations about the December rate hike, but the dollar will likely move up on comments on US Inflation and job growth.

21/ 11/ 2017

German political deadlock pressures Euro

German political deadlock continues to pressure the euro as German Chancellor Angela Merkel, whose conservative bloc lost seats in September's election, said she would inform the German president that she could not form a coalition, after the pro-business Free Democrats withdrew from negotiations. In addition, dovish comments from ECB President Mario Draghi is also weighing down the common currency. But after all, loss is limited, in particular against Dollar.

Heading into Europe, the UK inflation report hearings will remain the main interest for the EUR, GBP traders amid a lack of significant news from the Euroland and UK docket. Also, of note will be the RBA Governor Lowe’s speech and UK industrial order expectations data. Then the focus shifts to Janet Yellen, the Fed Chair, where she is scheduled to take part in a panel discussion on the topic “In Conversation with Mervyn King” at the Stern School of Business in New York University. Market volatility is expected during her speech.