August 2nd - Although there are still some key US economic indicators to be released before the FOMC meeting – namely Friday’s non-farm payrolls – many traders have already formed a consensus that the Fed will be leaving interest rates on hold at next week’s meeting. This is despite yesterday’s upbeat numbers showing that core inflation remains healthy and demand in the manufacturing sector is also strong, but the dollar has now held onto yesterday’s losses against a number of major currencies right through the Asian session. However, with the ECB widely tipped to add a quarter point at tomorrow’s meeting, Australian rates moving up to 6% last week and Japanese monetary policy finally starting to tighten, the longer term outlook is certainly casting dollar yields in a less than attractive light. With this in mind, assuming we do see no change to rates by Ben Bernanke, should the accompanying comments also be somewhat dovish then it would be of little surprise to find the greenback under further pressure in the near term. It would seem however that with current evidence suggesting that inflationary pressures are far from gone, any moratorium on US interest rate hikes will prove somewhat temporary in nature.
Disclaimer: Although obtained from sources believed by us to be reliable, CMC Markets and its affiliates cannot guarantee the accuracy or completeness of the information upon which this commentary is based. This commentary does not purport to disclose the risks or benefits or entering into particular transactions and should not be construed as advice in any specific instance. The views in this report constitute our judgement as of this date and are subject to change without notice.
Fx-charts.com Disclaimer: The information contained on this website is subject to change without notice, views and opinions expressed on fx-charts.com may be those of individual authors and may not necessarily be the views of fx-charts.com or its officers and employees, we make no claim to the accuracy or timeliness of any information contained herein. We recommend obtaining advice from a suitably qualified financial advisor before entering into any financial transactions or agreements. The use of this website constitutes acceptance of our privacy policy, disclaimer and terms of use. This website is available for information and educational purposes only.
Need a forex broker? click on any of the buttons for more info!
