FOMC, Tankan and oil prices in focus for currency traders
December 12th - The dollar is failing to make any significant headway over last week’s losses against the major currencies as traders remain cautious ahead of tomorrow’s FOMC meeting where although a 25 basis point hike is seen as inevitable, it’s a change in longer term sentiment that the market will be looking for. There has been a minimal degree of buying through the Asian session, but so far this has failed to amount to anything that could be seen as significant, with Wednesday’s Tankan survey from the Bank of Japan adding to the pensive attitude that’s prevailing in the market right now. Consensus seems to be building that the greenback may post some further small gains against the Yen in the near term, although the area around 121-122 is going to offer some significant trend line resistance and unless there’s some surprise data issued, a move beyond this point may be difficult to realise in the short term. Elsewhere, crude prices have pushed above the $60 mark once again as a cold snap hits parts of the US, driving demand for heating oil and this could reignite the inflationary concerns that had otherwise been abating, so there’s certainly no shortage of fundamental factors that will offer the currency markets momentum as we approach the Christmas break…
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