GBP/USD is currently trading at about 1.4890, GBP/EUR is at about 1.3700 and EUR/USD is at 1.0860. So, we have no major news, fairly range bound trading in the market, with few traders following what was going-on on Tuesday. In the UK is the same story again today, we had the PMI on Tuesday with Services better than expected, but didn’t really had a lot of benefit for the Sterling. Hence, there’s continued dollar buying, as everybody came back and put those positions back on after the long weekend. There’s nothing really today, but we’ll wait and see what comes out tomorrow, but again not likely to be too much from the Bank of England meeting on Thursday. We’ll have to wait for the minutes to get further information.
The story of the day from the United States will be the minutes release at 19:00 BST tonight, ahead of that is a couple of Fed speakers that will almost likely be dovish if anything. We’ve got Powell and Dudley, Powell is fairly centrist, while Dudley is dovish, and so we’ll see what they say ahead of the minutes.
We had an outgoing member of the Federal Reserve that was giving dovish statements yesterday and also pointed to the potentials to increase rates anytime soon. He also noted that the market needs about another 3 or 4 years of employment to move rates at that rate for us to get back to the levels we were at in 2006. So this is just a stark reminder of just where we have been in the employment sector, but certainly the picture at the moment is reasonably positive.
The question will really be even if we get a dovish minute from the Fed, would it stem the tide of dollar buying. At the moment, it may well just be some kind of weaker chart from the minutes, but actually it pushes the moving rate a little bit down the line. Another thing that could be interesting tonight is any view on the path of rate, once we do start seeing that first hike. So that would be fairly closely watched.
Out of Europe we had again PMIs, market numbers which were fairly positive. The overall European number came at 54, just where it was expected. If there’s anything out of Europe, then it would be the retail sales, which is expected to come out at 1.9{01de1f41f0433b1b992b12aafb3b1fe281a5c9ee7cd5232385403e933e277ce6} y/y growth, which would be a dip from the December/January figures which were out 3{01de1f41f0433b1b992b12aafb3b1fe281a5c9ee7cd5232385403e933e277ce6}. So we’ll see whether that does raise a potentially huge surprise slightly to the upside.
Further talks around Europe has been of the quantitative easing starting to have an impact. They did the amount that they had put forward in the last month, and it looks like they’ll continue to hit that €16B target.
The ongoing Greek situation continues, as there’s talks ongoing. There are some couple of deadlines coming up shortly, so they’ve got around about €1.4B to refinance by the end of this month and they also got another €400 million that they’ll pay to the IMF. So again, financing concerns and liquidity concerns will be hitting Greece surrounding any ongoing discussion.
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The post The FED Goes Dovish In A Relief To Bond Investors Around The World appeared first on Cutting-Edge FX Technology.
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