Janet Yellen and US GDP dominate USD thinking [Video]
|Today's Highlights
-
Sterling recovers ahead of UK GDP data
-
Janet Yellen and US GDP dominate USD thinking
-
UK Public Holiday on Monday may breed volatility
FX Market Overview
Our hearts go out to the poor earthquake affected villagers of central Italy, for whom the death toll keeps rising. The scenes are reminiscent of a war zone, with formerly beautiful villages reduced to ugly piles of rubble interspersed with rescuers doing their utmost to find any sign of survival. Nature can be awesome for both good and bad reasons but is certainly without compassion or discrimination when it moves the earth’s tectonic plates.
In a sure sign that investors are becoming less risk averse, the price of gold has fallen to a one-month low. That comes ahead of, what is considered to be a very important speech by Federal Reserve Chair, Janet Yellen later today. Her address to the Policy Symposium at Jackson Hole is likely to reiterate previous comments that US interest rates are likely to be hiked before the year end but there is a lot of debate over whether the Fed is going to be confident enough in the US and global recovery to make that move. Either way, the US Dollar will be affected and it will also react to the second estimate of US economic growth, due for release at 13:30 GMT.
The UK version of the GDP growth data, second release is due at 09:30 GMT and there is a suggestion this morning that this could produce a small uptick in the data. Sterling; which has gained a little in the past week, could well end the week on a high if that proves to be true. In fact, if the year on year figure only meets the 2.2% growth forecast, that will be a positive story but we will have to see the Q3 data to see the after-effects of the Brexit vote. To be fair though, recent UK data has been rather more upbeat than most expected, so that might also impress.
That is about all there is to report today. It is, as I suspect you know, the last day before a long bank holiday weekend in the UK, so Monday will be devoid of UK activity and that take 40% out of the foreign exchange market. Therefore, there is scope for more volatility in the thin market conditions. This is a great opportunity for those who like to use automated orders to capture attractive ‘above market’ rates. Call us if you would like to see how that might work for you.
Have a great weekend everyone.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.