The past month has seen FX volatility increase for a variety of reasons and things don’t look set to calm down this week, with two key events to look forward to. The first is the Fed meeting on Wednesday, where the market is becoming more concerned that we could see a change of language in the accompanying statement. In recent years, the Fed’s forward guidance has pledged to keep rates at their current level “for a considerable time”, with this also being linked to other measures, such as unemployment. It’s already emerged in the minutes that some members are not comfortable with this language, so an official move away would be seen as a further dollar positive sign, depending how the Fed offsets it (if at all) with other changes in the statement. Overall though, this is likely to keep the dollar on a stronger footing, especially with bond yields also rising in anticipation of such a change.
The other event is the impending referendum on independence in Scotland which has instigated considerable volatility on sterling over the past couple of weeks. The pound saw some recovery last week as the polls were less in favour of the Yes side, but it remains far too close to call for the vote taking place on Thursday. Elsewhere, the Aussie continues to suffer, having briefly broken through the 0.90 level during Asia trade. Iron ore prices recovered a touch towards the end of last week, reflecting the fact that this is more than just a commodity price story on the Aussie. USDJPY rose every day last week and although we are seeing a steady tone so far, further weakness looks to be on the cards given the breakout from what has been a very tight range for most of the year. Key data and events are thin on the ground today, but this should not deter those from positioning ahead of the key events this week.
FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.
Recommended Content
Editors’ Picks
AUD/USD favours extra retracements in the short term
AUD/USD kept the negative stance well in place and briefly broke below the key 0.6400 support to clinch a new low for the year on the back of the strong dollar and mixed results from the Chinese docket.
EUR/USD now shifts its attention to 1.0500
The ongoing upward momentum of the Greenback prompted EUR/USD to lose more ground, hitting new lows for 2024 around 1.0600, driven by the significant divergence in monetary policy between the Fed and the ECB.
Gold aiming to re-conquer the $2,400 level
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
Bitcoin price defends $60K as whales hold onto their BTC despite market dip
Bitcoin (BTC) price still has traders and investors at the edge of their seats as it slides further away from its all-time high (ATH) of $73,777. Some call it a shakeout meant to dispel the weak hands, while others see it as a buying opportunity.
Friday's Silver selloff may have actually been great news for silver bulls!
Silver endured a significant selloff last Friday. Was this another step forward in the bull market? This may seem counterintuitive, but GoldMoney founder James Turk thinks it was a positive sign for silver bulls.