19/ 06/ 2019

Dollar Steadies before Fed Rate Cut Decisions

The dollar held near a two-week high early today ahead of the Federal Reserve’s closely-watched policy decision later in the day, supported by a surprisingly dovish European Central Bank and bearish Eurozone economic data. Focus was on whether the greenback can retain its strength after the Fed’s two-day policy meeting ends later today. The Fed is widely expected to stand pat on monetary policy this time but open the door for an interest rate cut at the next meeting in July. Shortly after the opening, prices soared on the hope that a meeting between U.S. President Trump and China President Xi Jinping would lead to an eventual trade deal between the two economic powerhouses.

On the other hand, sterling is pressured as markets raise their bets on no-deal Brexit on Boris Johnson’s lead in Conservative leadership race. 

Main focus will be around US FOMC rate cut decision & their future economic projections along with GBP Consumer Price Index.

18/ 06/ 2019

Trade War Chatter & Economic Data in Focus

It was a mixed day for the European majors on Monday.Trade war chatter on the day continued to pressure the majors. Chatter from the U.S administration continued to suggest possible tariffs on auto imports. Trump is also reportedly more than happy to impose fresh tariffs on an additional $300bn worth of Chinese goods should progress not be made at the G20 Summit next week.

The euro strengthened against US dollar, as investors reconsidered how dovish the Federal Reserve is likely to be at this week’s policy meeting. Broader currency markets were quiet, as traders hesitated to put on large positions before the Fed’s two-day meeting, a meeting of ECB policymakers in Portugal and bank of England’s interest rate decision on Thursday. On the other hand, the Pound extended decline against the Dollar, as concerns grew that Britain was heading for a no-deal Brexit after Boris Johnson got a boost in his bid to replace Prime Minister Theresa May.

Economic data is on the heavier side in the day ahead. German and Eurozone economic sentiment figures due out later this morning will provide direction. Outside of the stats, ECB Draghi will also speak in a number of scheduled speeches, which could deliver support should there be any EUR jawboning. From the U.S, housing starts and building permits are due out. While the numbers tend not to have a material impact on the majors, any particularly weak numbers could be yet another alarm bell. The housing sector is traditionally an economic barometer.

17/ 06/ 2019

Week Ahead | FED, BoE, UK leadership race, and Trade War in focus

The dollar held near a two-week high against its major rivals earlier today ahead of a crucial U.S. Federal Reserve meeting that many expect will lay the groundwork for an interest rate cut to bolster the world’s largest economy. While strong U.S. retail sales on Friday reduced the already-low chance of an easing this week and lifted the dollar, investors are betting Fed Chairman Jerome Powell would leave the door open to future rate cuts in light of increasing economic strains.

“As long as Powell does not rule out near term rate cuts, the dollar will be top heavy after the Fed meeting”, Expectations of an interest rate cut at the Fed’s June 18-19 meeting fell from 28.3% on Thursday to 21.7% in the wake of the strong retail data statements released by Senior Strategists across the globe.

An escalating trade war between the United States and China has rippled through global supply chains in a hit to business investment, factory output and world growth.

It’s a big week ahead. The FED, the BoE, the UK leadership race, and trade war chatter will be in focus along with a busy economic calendar.

13/ 06/ 2019

Dollar Outweighs Rivals Across the Board but Market Treads Cautiously

The dollar held its gains on Wednesday evening session after rebounding from 11-week lows, as peers such as the euro, pound and commodity currencies sagged. Data released yesterday showed U.S. consumer prices barely rose in May, pointing to moderate inflation that together with a slowing economy increased pressure on the Fed to lower interest rates this year. The euro took a hit after U.S. President Donald Trump said yesterday he was considering sanctions over Russia’s Nord Stream 2 natural gas pipeline project and warned Germany against being dependent on Russia for energy.

Sterling slipped as British lawmakers defeated an attempt led by the opposition Labor Party to try to block a no-deal Brexit. Investors are concerned the next prime minister could put Britain on course for a no-deal divorce with the European Union.

 The Australian Dollar will be nervously eyeing upcoming employment data for May. Australian jobs reports have recently picked up in importance after the RBA mentioned it is closely watching the labor market after delivering last week’s rate cut. A dismal outcome can add fuel to current near-even odds of a cut in July, sending the Aussie lower.

Regardless of economic data released by US & Europe, major focus will be around geo-political tensions among US against Iran & Russia.