US: Economy strengthening – Westpac

Sandeep Kanihama FXStreet Contributor

Elliot Clarke, Research Analyst at Westpac, suggests that the strength of the US economy is set to justify four hikes by the FOMC to June 2019, but equally the risks thereafter.

Key Quotes

“Despite very strong employment growth and a much-improved financial position, US consumers are hesitant to spend. Indeed, in 2018-to-date, they have actually throttled back on discretionary consumption and reduced housing investment.”

“Also a clear risk to aggregate growth is business investment. So far trade tensions have offset the would-have-been benefit of President Trump’s stimulus. But, if uncertainty persists, then investment could become an outright negative for the US economy.”

“If we are correct and US growth falls back to trend in 2019, the upswing seen in the US dollar this year will reverse course from Q2 2019, benefitting currencies as diverse as the Euro, Yen and Renminbi. Buffeted by declining commodity prices, the Australian dollar is instead expected to continue falling to around USD0.70 by end-2019.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.