28/ 02/ 2017

Dollar Steady Ahead of Trump Speech

U.S. Treasury yields rose on Monday from multi-week lows touched Friday on expectations that a speech by U.S. President Donald Trump due on Tuesday could drive yields higher, while hawkish comments from a Federal Reserve official also contributed.

Main focus will be on Mr. Donald Trump who will address a joint session of Congress early morning tomorrow (6.00.A.M UAE time) where markets will be watching with its fingers on the buy and sell buttons as he makes what is essentially his first State of the Union address.

26/ 02/ 2017

Week Ahead | Who is going to influence USD more - Trump or Yellen?

Last week fed policy statement was upbeat discussing the possibility of another rate hike. However most analysts expect a rate hike only in May. U.S. benchmark 10-year Treasury note yields dropped to five-week lows on Friday, pressured by declines amid persistent political uncertainty in Europe and soft batch of U.S. data that suggested a more mixed outlook for the world's largest economy.

This week is full interms of major economic data coming out from Euro zone and USA. The main focus will be on Mr. Donald Trump who will address a joint session of Congress on Tuesday, where markets will be watching with its fingers on the buy and sell buttons. Janet Yellen is due to deliver a speech on friday where markets will get to know what she’s thinking and what the likely path of interest rates is going to be.

23/ 02/ 2017

March Fed rate hike is off the table

Yesterday the US Dollar was strong ahead of FOMC Minutes, particularly against its European rivals and with the clear exception of the Japanese yen. The Euro was among the weakest, as political woes undermine demand for the common currency, regardless of positive data coming from the region.

Later on focus turned to FOMC meeting minutes which showed that there’s only a 22 % probability of a rate hike in March which is lower than expected. However it also mentioned that improving US economy and the possibility that the Trump administration’s proposed economic policies which could push inflation up faster than anticipated can support US Dollar in the long term.

22/ 02/ 2017

Dollar's Shining Day

US Dollar had a shining day despite softer U.S. data and a retreat in U.S. yields.  The 10 year Treasury yield rose over 4bp before retreating from its highs but none of this mattered as investors focused on last week's important data surprises and optimism from Fed Chair Janet Yellen. This resulted in EUR/AED sliding to 3.87 while GBP/AED dropping to 4.565.

It would be interesting to see whether Today’s FOMC minutes will give the dollar the kick it needs to propel higher.  Markets expect Fed’s to raise interest rates, but the tone of the last FOMC statement was more cautious than Janet Yellen's semi-annual testimony so the minutes could provide a nudge but not necessarily the swift kick upwards for Dollar.