In 564 words, the US Federal Reserve yesterday told us that policy may rise next year, but it may not. The pre-meeting speculation centred around their stated intention to keep rates near zero “for a considerable period”. Now, they can be “patient” in normalising policy, but state that this consistent with their previous language. So, they changed the words, but not their meaning… supposedly. That said, Fed Chair Yellen appeared a little more hawkish in the press conference, implying that this could means that rates will remain at current levels at least for the first quarter of next year. In summary, the dollar did not know what to make of the statement, ending up pretty much unchanged in the aftermath. The press conference however put the dollar firmer against all major currencies as the near term outlook for rates was revised higher. The forecasts published alongside the statement did show a slowdown in the pace of anticipated rate increases.
The other piece of overnight news has been the move to negative rates by the SNB. This will apply to sight deposits, with a -0.25% mid-point to the SNB's target range for 3-mth CHF LIBOR. This is not wholly surprising given the prevailing levels of EURCHF, but the CHF response has been modest, weakening some 0.4% initially.
The IFO data today for Germany will be the main focus early on, where a modest improvement is anticipated. Also in focus will be UK retail sales and the usual Thursday claims data in the US. Naturally, an eye will be kept on the situation on the Russian rouble, where some signs of stability were emerging on Wednesday and early this morning. But there remains a considerable degree of uncertainty going forward regarding not only Russia, but many other emerging market currencies and volatility is likely to remain on the high side going into year end.
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
EUR/USD trades with negative bias, holds above 1.0700 as traders await US PCE Price Index
EUR/USD edges lower during the Asian session on Friday and moves away from a two-week high, around the 1.0740 area touched the previous day. Spot prices trade around the 1.0725-1.0720 region and remain at the mercy of the US Dollar price dynamics ahead of the crucial US data.
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.