Treading-water week before Yellen sparked a short-lived spurt of USD strength
|Markets spent much of the week treading water before Yellen sparked a short-lived spurt of USD strength, with all eyes remaining on Fed speak next week as well as US nonfarm payrolls
The August lull continued for much of this week, with volatility particularly muted, accompanied by light newsflow. Much of the session was spent awaiting comments from Fed’s Yellen, with recent rhetoric from the likes of Fischer and Dudley striking a more hawkish tone and market participants speculating as to whether Yellen may follow suit. Rhetoric from Yellen saw a fast money move higher in the USD, after she stated that rate hike case has strengthened in recent months and economy is nearing the Fed's inflation and employment objectives. However, the USD strength was short lived given the lack of a specific mention of September, combined with the quantity of data still due from the US ahead of the next FOMC meeting on September 21st.
Elsewhere, one of the more notable movers this week saw significant upside in USD/ZAR amid uncertainty over the future of the Finance Minister after reports stating that the police have summoned him over an investigation into a suspected rogue spy unit in the tax service. NZD has also seen focus this week, with NZD/USD trading higher by around a point by Friday after RBNZ governor Wheeler who warned against rapid rate cuts and stated immediate easing is unnecessary.
Looking ahead to next week, it appears USD is set to remain in focus, with a host of Fed speakers scheduled as well as the latest nonfarm payroll report. Given Yellen’s tone, the upcoming data and rhetoric will take on a heightened significance, as to the legitimacy of a possible September rate hike is tested. Elsewhere, next week also sees CPI readings from Germany and the Eurozone, as well as manufacturing PMIs from across the globe.
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.