Should Dollar Bulls Be Worried?
|Market Drivers March 13, 2017
USD retreats
Cable takes out 1.2200
Nikkei 0.15% Dax 0.16%
Oil $48/bbl
Gold $1207/oz.
Europe and Asia:
JPU Tertiary Industry Index 0.0% vs. 0.2%
North America:
No Data
It’s been a typically quiet start of the week in the FX market as currency traders gear up for the critical FOMC rate decision this Wednesday, March 15. In fact that date promises to be a very volatile day across all fronts as the currency markets will not only get the FOMC rate decision but the BOJ meeting and the Australian labor data as well.
For now, the markets appear to be content to take slight profits from the dollar after last Friday’s strong NFP data. The US payroll numbers handily beat the 196K forecast coming in at 235K although the average hourly earnings rose by only 0.2% versus 0.3% eyed. Still, the US data has been almost uniformly bullish and yet the greenback has failed to make much progress.
USD/JPY once again has been rejected at the 115.00 figure which remains a cement ceiling for the pair, having failed to break out above that level more than 4 times since the start of the year. The price action on the FX market is not confirming the strong fundamental view for the dollar which should begin to worry dollar bulls, as the buck fails to respond to data and rhetoric and perhaps even rate hikes.
That’s why the FOMC meeting should be such seminal event for the market. If it fails to jumpstart the dollar rally, the correction in the greenback could be vicious despite all the good news on the economic front.
Meanwhile, today’s action will once again center on the 114.00-115.00 corridor. With no eco data on the docket, FX will take its cues from fixed income and equity markets which also remain quiet ahead of the Fed
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