Dollar firms despite Fed minutes sounding a dovish tone on rate
Dollar firms despite Fed minutes sounding a dovish tone on rate rise outlook
While many Federal Reserve officials expected another rate hike would be appropriate later this year, many also expressed concern that inflation might be more than transitorily low
For the dollar and near-term price action, given the market has largely priced in a December hike, the burden of proof is placed on this Friday’s consumer price index report. This backdrop leaves us comfortable holding long exposure to the euro and the yen
A four-session slide in the dollar prompted by dovish comments from Federal Reserve policymakers stalled while US bank earnings failed to ignite Wall Street stocks.
Global equities were mixed while the euro dipped and a volatile ride for the pound saw it sinking after the EU’s Michel Barnier said that talks on Brexit terms with the UK were at “deadlock”.
However, sterling later recovered amid a German media report of some progress in negotiations.
“However, the Federal Reserve minutes poked dollar bears into thinking that, while a December rate increase looks a lock at this point — around 80 per cent priced in — the Fed sounded somewhat concerned about the weak pick-up in inflation, keeping the outlook for 2018 hikes quite equivocal.”
Analysts pointed to Friday’s US consumer price inflation release as the next key data point for Fed policymakers and the short-term direction of the dollar but others highlighted the forthcoming change of the US central bank’s leadership.
“Expectations over the outlook for Fed policy will be largely dictated in the coming months by President Trump’s nomination for the next Fed chair”
While many Federal Reserve officials expected another rate hike would be appropriate later this year, many also expressed concern that inflation might be more than transitorily low
For the dollar and near-term price action, given the market has largely priced in a December hike, the burden of proof is placed on this Friday’s consumer price index report. This backdrop leaves us comfortable holding long exposure to the euro and the yen
A four-session slide in the dollar prompted by dovish comments from Federal Reserve policymakers stalled while US bank earnings failed to ignite Wall Street stocks.
Global equities were mixed while the euro dipped and a volatile ride for the pound saw it sinking after the EU’s Michel Barnier said that talks on Brexit terms with the UK were at “deadlock”.
However, sterling later recovered amid a German media report of some progress in negotiations.
“However, the Federal Reserve minutes poked dollar bears into thinking that, while a December rate increase looks a lock at this point — around 80 per cent priced in — the Fed sounded somewhat concerned about the weak pick-up in inflation, keeping the outlook for 2018 hikes quite equivocal.”
Analysts pointed to Friday’s US consumer price inflation release as the next key data point for Fed policymakers and the short-term direction of the dollar but others highlighted the forthcoming change of the US central bank’s leadership.
“Expectations over the outlook for Fed policy will be largely dictated in the coming months by President Trump’s nomination for the next Fed chair”
Kommentera:
US Real Avg Weekly Earnings (Y/Y) Sep: 0.60% (prev R 1.00%)
-Real Avg Hourly Earnings (Y/Y) Sep: 0.70% (prev R 0.70%)
US CPI Ex-Food and Energy (M/M) Sep: 1.10% (est 0.20%; prev 0.20%)
-CPI Ex-Food and Energy (Y/Y) Sep: 1.70% (est 1.80%; prev 1.70%)
US CPI (M/M) Sep: 0.50% (est 0.60%; prev 0.40%)
-CPI (Y/Y) Sep: 2.20% (est 2.30%; prev 1.90%)
www.cnbc.com/2017/10...early-next-year.html
-Real Avg Hourly Earnings (Y/Y) Sep: 0.70% (prev R 0.70%)
US CPI Ex-Food and Energy (M/M) Sep: 1.10% (est 0.20%; prev 0.20%)
-CPI Ex-Food and Energy (Y/Y) Sep: 1.70% (est 1.80%; prev 1.70%)
US CPI (M/M) Sep: 0.50% (est 0.60%; prev 0.40%)
-CPI (Y/Y) Sep: 2.20% (est 2.30%; prev 1.90%)
www.cnbc.com/2017/10...early-next-year.html
Kommentera:
USD/JPY fall into the demand zone.
Kommentera:
Kommentera:
USDJPY retreats to lower from 113.15 highs
“History has proven that a convergence of Fibonacci numbers and price patterns provides a highly probable area for a reversal.… This area of convergence is called the potential reversal zone. When three, four, or even five numbers come together within a specific area, you must respect the high probability for some type of reversal.”
(The Harmonic Trader, )