The dollar recovery over the past few days has been a talking point within the market as it has brought some landmark levels in some of the majors with the Yen hitting its highest level since 2002. The euro has also suffered losses retreating from above 1.1400 back below 1.1100 and is at 1.0935 this morning. The US economy has not been as strong as many had expected in the beginning of 2015 which has led to the pull back in the dollar as rate hike expectations are pushed back, but it also means that the bar has been lowered in terms of economic data going forward allowing greater chase of upside surprises and a dollar recovery. This is what we’ve seen since the middle of May leading to the dollar bounce and a rally in 2 year Treasury yields, however this morning the dollar is giving back some of its recent gains.
For the rest of the week sterling might see movement as the newly elected UK Prime Minister David Cameron goes on his whistle stop tour of Europe to commence talks with other EU leaders in respect to his proposed referendum on the UK’s membership of the EU. The pledge is to hold this referendum by the end of 2017, however there is mounting pressure to bring the vote forward in order to remove the uncertainty it would create for business, so there’s a growing likelihood we’ll see the vote being held in 2016 then sterling could react negatively. It’s in many people’s interests to see an earlier vote as David Cameron will not want what is both a hugely important political and economic decision to be long and drawn out whilst the Germans, who have been conciliatory and are clear in being open to negotiations, have elections in 2017 where they would not want to see a UK referendum muddying their electoral waters.
Also today UK GDP is released this morning which is due to be revised up from 0.3% to 0.4% for Q1 and Eurozone consumer and business confidence data soon after could see some movement in the euro, meanwhile we should note forget Greece which will be discussed at the G7 finance minister meeting being held ahead of the main G7 summit next month.
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: Uptrend remains capped by 0.6650
AUD/USD could not sustain the multi-session march north and faltered once again ahead of the 0.6650 region on the back of the strong rebound in the Greenback and the prevailing risk-off mood.
EUR/USD meets a tough barrier around 1.0800
The resurgence of the bid bias in the Greenback weighed on the risk-linked assets and motivated EUR/USD to retreat to the 1.0750 region after another failed attempt to retest the 1.0800 zone.
Gold eases toward $2,310 amid a better market mood
After falling to $2,310 in the early European session, Gold recovered to the $2,310 area in the second half of the day. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and helps XAU/USD find support.
Bitcoin price coils up for 20% climb, Standard Chartered forecasts more gains for BTC
Bitcoin (BTC) price remains devoid of directional bias, trading sideways as part of a horizontal chop. However, this may be short-lived as BTC price action consolidates in a bullish reversal pattern on the one-day time frame.
What does stagflation mean for commodity prices?
What a difference a quarter makes. The Federal Reserve rang in 2024 with a bout of optimism that inflation was coming down to their 2% target. But that optimism has now evaporated as the reality of stickier-than-expected inflation becomes more evident.