|

Will the Fed be Finally Convinced to Slash Rates? [Video]

The dollar weakened last week after a deluge of disappointing data like the ISM and the NFP while safe-havens gained as investors nervously await U.S.-China talks this week for signs of whether the two sides can de-escalate or end their simmering trade war. The streak of weak U.S. data has meanwhile put more pressure on the Federal Reserve to slash rates sooner rather than later so investors will be closely monitoring the release of the latest FOMC minutes this Wednesday. 

Markets Turn Red as Optimism Fades

Global bourses pushed in negative territory today amid broader fears that the U.S. and China will fail to resolve their trade differences while a fresh wave of violent incidents in Hong Kong weighed on Asian Markets. In Europe major indices opened on a bearish note this morning as traders search for hints on the direction of Brexit and U.S.-China trade talks. On the Brexit front, markets are also uncertain as there is no resolution in sight ahead of the Oct 31st deadline. 

Brexit: What’s Happening? 

British negotiators will be given another chance today to explain their Brexit plan, while President Emmanuel Macron of France said he had given Boris Johnson, Britain’s prime minister, until this Friday to come up with a totally revised plan — emphasizing that the current one is unacceptable.

USD Subdued on Weak Data and Impeachment Investigation

The dollar remains subdued on weak data, deflated hopes of a U.S./China agreement and mounting pressure on U.S. President Donald Trump during a fresh impeachment investigation. The number of “whistle-blowers” has also increased to two after a second intelligence official with “firsthand knowledge” provided information related to President Trump’s dealings in Ukraine, according to the legal team now representing both whistle-blowers. The lawyers said their new client, whose identity is not known, had grown alarmed by the president’s behaviour and was among those interviewed to corroborate the allegations of the first whistle-blower.

eurusd

Will CAD Slip to Fresh Lows? 

The Canadian dollar is rounding up the week with unemployment numbers and might show another bearish round, especially with as oil prices continue to dip lower. Oil prices extended last week’s heavy losses, with traders fearing the global economic slowdown will weigh on future oil demand growth while pegging hopes for a rebound on progress in talks this week on ending the U.S.-China trade war.

Author

Frank Walbaum

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

More from Frank Walbaum
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD declines toward 1.1700 on solid USD recovery

EUR/USD turns south and declines toward 1.1700 on Wednesday. A solid comeback staged by the US Dollar weighs heavily on the pair, as traders look to USD short covering ahead of US CPI on Thursday. However, the downside could be capped by hawkish ECB expectations. 

GBP/USD slides toward 1.3300 after softer-than-expected UK inflation data

GBP/USD has come under intense selling pressure, eyeing 1.3300 in the European session on Wednesday. The UK annual headline and core CPI rose by 3.2% each, missing estimates of 3.5% and 3.4%, respectively, reaffirming dovish BoE expectations and smashing the Pound Sterling across the board. 

Gold clings to modest gains above $4,300

Following Tuesday's volatile action, Gold regains its traction on Wednesday and trades in positive territory above $4,300. While the buildup in the USD recovery momentum caps XAU/USD's upside, the cautious market stance helps ithe pair hold its ground.

Bitcoin risks deeper correction as ETF outflows mount, derivative traders stay on the sidelines

Bitcoin (BTC) remains under pressure, trading below $87,000 on Wednesday, nearing a key support level. A decisive daily close below this zone could open the door to a deeper correction.

Monetary policy: Three central banks, three decisions, the same caution

While the Fed eased its monetary policy on 10 December for the third consecutive FOMC meeting, without making any guarantees about future action, the BoE, the ECB and the BoJ are holding their respective meetings this week. 

AAVE slips below $186 as bearish signals outweigh the SEC investigation closure

Aave (AAVE) price continues its decline, trading below $186 at the time of writing on Wednesday after a rejection at the key resistance zone. Derivatives positioning and momentum indicators suggest that bearish forces still dominate in the near term.