15/ 10/ 2017

Week Ahead | Will Yellen Boost the US Dollar?

It has been a rather volatile week. We were partly correct in expecting strong impact from politics on the markets. But the reactions to central bank news and economic data surprised us. Dollar was clearly weighed down by FOMC minutes and CPI miss and ended as the weakest one. Meanwhile, Euro reversed early gains and ended mixed on rumors about ECB's tapering plan. There were practical no impacts from US President Donald Trump, North Korea and not even Catalonia. Markets also ignored UK Prime Minister Theresa May. Nonetheless, politics did play a role in the extraordinary volatile in Sterling, which ended as the strongest one.

Looking ahead, we will get key economic data and releases from Australia, the UK, and US with some Fed reactions to be look at but the major highlight of this week will be the speech of Yellen that is due on Friday which will give a future outlook for Interest Rates for this quarter.

12/ 10/ 2017

Dollar Sheds its Gains Post FOMC Minutes

The U.S. Dollar declined against a basket of currencies on Wednesday, hitting a two-week low, in reaction to the U.S. Federal Reserve minutes which revealed that central bank policymakers are open to an interest rate hike in December, but are still concerned about weak inflation. Meanwhile, the EUR, GBP traders today eagerly await the release of the Eurozone industrial figures and BOE credit conditions survey, in absence of the first-tier macro data on the calendar so far, this week.

Looking ahead of the day, the main market movers for today are expected to be the US PPI, ECB Draghi’s speech and Fedspeaks. FOMC officials Brainard and Powell are due to speak later today.

11/ 10/ 2017

The Dollar and the FOMC Meeting Minutes in Focus for the Day

Euro trades broadly higher as lifted by comments from ECB officials that affirm the expectation of some sort of tapering in asset purchases next year. Catalonia remains a risk to the common currency but the case for independence seem to be fading. The risk is taking a back seat for the moment. Meanwhile, Sterling also recovers together with Euro as Prime Minister Theresa May seems to be safe from being ousted for now.

It’s a busy day ahead for the markets, with the EUR finding relief off the back of news that the Catalan president Puigdemont has taken dialogue over a call for independence, following threats from Spanish Prime Minister Rajoy’s over the weekend. The key driver for the Dollar will be the release of the FOMC meeting minutes later today.

10/ 10/ 2017

The Pound in the Spotlight with Trade and Production Figures in Focus

It has been a slow day in the markets yesterday, which is understandable as it is a holiday in Japan and also in the US and Canada as well. This has led to some liquidity and hence some low volatility in the markets as well. The U.S. Dollar Index traded water most of the session on Monday due to the lack of direction. Traders showed some concern to reports that North Korea may be preparing to launch a long-term missile that may be capable of reaching the U.S. West Coast. The index also reacted to upbeat German data.

As for today, UK productions will be the main focus in European session, and trade balance will also be released. Germany will also release trade balance while Swiss will release unemployment rate. Later in the day, Canadian housing data will be featured. From the US docket, we have no significant macro news, and hence, all eyes will remain on the Fed speaks. We may see another low volume session on Tuesday since the next major report doesn’t come in until Wednesday when the Fed releases the minutes from its September meeting.