It may be a relatively quiet end to the week as traders digest the last two days of Powell's testimony and US data and weigh up the prospects for interest rates this year.

Powell's appearance Wednesday was extremely well received, with the Fed Chairman giving us as dovish a message as he was ever likely to. There was no attempt to discourage investors from fully pricing in a July cut so that looks as close to a certainty as you can expect to see.

Investors appear encouraged that it won't be the last as well, with his gloomier assessment of the outlook appearing an indication of future cuts. The CPI numbers on Thursday added a layer of confusion, as weak price pressures are one of the primary factors supporting calls for cuts. A core annual inflation reading of 2.1% may well leave people wondering whether inflation is as lacking as Powell indicated and the Fed's preferred PCE measure suggests.

Stocks ended the day higher on Thursday and Europe is slightly in positive territory at the open but the data yesterday did take some of the wind out of the sails. This may put more emphasis on the PPI data today but broadly speaking it's looking a little thin. Thankfully, Monday marks the start of earnings season so we won't have to wait long for something to get our teeth into.

Cryptocurrencies are Trump's latest bugbear

Trump's attack on Libra and cryptocurrencies as a whole didn't have as great an impact on the space as you might have typically expected. The President declared he's not a fan, insisting they are not money and that Facebook and others would need a banking charter and become subject to all regulations. In ending the attack by lauding the dollar's dependability and dominance, it makes you wonder whether the President is feeling a little threatened by Facebook's foray into the space.

The President's tweets were enough to sink bitcoin by around $500 over the next couple of hours but by its own standards, this is a rather mild response. It has also since halved that deficit so the initial response - granted not at the busiest time of the day - has been fairly muted. It will be interesting to see if traders respond more over the course of today, especially if this turns out not to be a one-off attack.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD loses 1.1800 amid escalaing US-Sino tensions

EUR/USD dips sub-18 after the US reported an increase of 1.763 million jobs in July, better than estimated but pointing to a deceleration. Escalating Sino-American tensions are boosting the dollar and fiscal talks are eyed. 

EUR/USD News

GBP/USD resumes decline, weighed by UK concerns, US-China conflict

GBP/USD trades at fresh weekly lows below 1.3050 as the dollar got a sudden boost from mounting tensions between the world's two largest economies. UK Chancellor Rishi Sunak said the furlough scheme that is underpinning the economy cannot last forever.

GBP/USD News

XAU/USD drops $50 from record highs to the $2020 area

Gold prices are falling sharply on Friday, trading below $2040/oz at the moment. Earlier on Friday, the yellow metal reached at $2075, a new record high.

Gold News

Bitcoin may extend the recovery once Gold resumes the rally

Gold retreated from the recent highs, but the sentiments are still bullish. Cryptocurrencies resumed the upside, some altcoins are demonstrating strong gains. ETH/BTC stopped the downside correction and settled at $0.03300.

Read more

WTI drops 1% to $41.50 ahead of US NFP, rigs data

WTI (futures on Nymex) is on a steady decline so far this Friday, undermined by reduced demand for higher-yielding assets amid the renewed US-China tensions induced risk-aversion.

Oil News

Forex Majors

Cryptocurrencies

Signatures