Dealers have spent the last 24 hours digesting Friday’s CPI fallout while keeping an eye on geopolitical risk amidst the deluge of Fed chair speculative headlines. As for the dollar, there was nothing earth-shattering within these idiosyncratic storylines usurping any broader USD trend. All in all, it made for a somewhat sleepy Monday in G-10

It’s not wise getting too comfortable as tranquil Monday’s tend to foreshadow a climatic tipping point and today’s substantial economic diary could prove to be a real test of investor sentiment.

Also, it’s worth keeping an eye on the expanding laundry list of geopolitical flashpoints. We’re not only dealing with issues in the Korea Peninsula, but now an unpopular shooting war between Iraqi forces and the Peshmerga is full blown. With Turkey-US relations souring, and as the world is still trying to figure out what to do with ISIS, the Middle East looks like a powder keg waiting to explode.

Fed Chair debate

There’s a growing buzz surrounding Stanford’s Taylor who is suggested to be in Trump’s good books, while the lack of impressive academic credential seems to be weighing negatively for former frontrunner Kevin Warsh. Also, Yellen is rumoured to be meeting with the president this week, and she is expected to be the last primary candidate interviewed for the job suggesting that decision time is near.

Euro

Traders continue to probe the EUR downside resolve after last weeks dovish Draghi comments and a slight rise in EU political risk in the wake of the surprising Austrian elections  The EUR  was primarily offered against the crosses with EURJPY looking suspectable to the bid tone on USDJPY.

Australian Dollar

The AUD was G-10 worst performer overnight despite the common signals suggesting otherwise. Metals ratcheted higher on very optimistic growth forecasts coming out of the Communist Party Summit. Also, yesterday’s China Data supported regional risk, so the overnight AUD  sell-off is a bit surprising. However, the reversals is likely more a case of traders taking profit ahead of the RBA Minutes based on  their  well-known dovish guidance

The British Pound

Brexit headlines continue to batter the Pound but with UK CPI report for September; and the testimonies of three key BoE members (Carney and for the first time, members Ramsden and Tenreyro) on tap, sterling traders will be buckling in for a bumpy ride. UK inflation is sitting just shy of the 3%, and if Septembers forecast to touch the elevated 3 % level, it will exert immense pressure on the BoE to begin the tightening cycle and should play positively for the Pound. Keep in mind; Carney has been extraordinarily Hawkish of late so his testimonies will also be a central focus for traders this afternoon.

Japanese Yen

The anticipated wave of dollar selling after last Friday’s weak CPI failed to gain much traction below 111.75, and then USD bounced to 112.20 on Bloomberg headlines reiterating that Taylor is in Tumps good books. Thre remains an air of apprehension to sell dollar this week as traders are looking over their shoulder as hawkish Fed Chair headlines unfold.

Little to report ahead of the election this coming Sunday, where Abe continues to look strong. A substantial outcome for Abe should, in turn, mean a weaker JPY.

Chinese Yuan

Chinese data was robust but had a minor impact on currency markets. Unquestionably, the market is sitting tight while keeping eyes peeled and ears to the ground for any groundbreaking policy shift to come out of the Chinese Communist Pary Congress

SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.

Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.

Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD: Bulls and bears jostle between 50-DMA and 0.7025 hurdle

AUD/USD: Bulls and bears jostle between 50-DMA and 0.7025 hurdle

AUD/USD remains idle around d 0.7000 as traders await fresh signals during Tuesday’s Asian session, after the upbeat start of the week. The Aussie pair seesaws between the 50-DMA and the downward sloping resistance line from late April.

AUD/USD News

EUR/USD still inside the woods below 1.0200

EUR/USD still inside the woods below 1.0200

The EUR/USD pair has displayed a gradual decline and has slipped to near 1.0193 after failing to surpass the critical hurdle of 1.0220 in the New York session. On a broader note, the asset is advancing modestly after printing a low of 1.0146 last week.

EUR/USD News

Gold buyers approach $1,800 on softer DXY ahead of US inflation

Gold buyers approach $1,800 on softer DXY ahead of US inflation

Gold price cheered US dollar pullback and softer yields to print the latest gains, before taking rounds to $1,790 during the initial Asian session on Tuesday. The metal’s upward trajectory also took clues from equities as the key began the week’s trading on a positive side but retreated by the end of the day.

Gold News

Dogecoin: Expect a decline, but don't miss the train if it leaves early pt.2

Dogecoin: Expect a decline, but don't miss the train if it leaves early pt.2

Dogecoin coils within a newfound congestion zone for nearly 2 months. A sweep the lows event could present itself in the coming days. Invalidation of the bearish scenario is a definitive closing candle above $0.0780. Said price action would induce a 75% rally towards $0.12.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Majors

Cryptocurrencies

Signatures