FOMC: A Wait-and-See Approach
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- April 30, 2024
Over the past 4 months, the AUD has consistently been at the bottom end of the G10 currencies. This slide has been driven by the market racing to pricing the next wave in the RBA’s easing cycle. The sell-off has been justified as 3 cuts in 5 months and a spread between the US
READ MOREOver the past 5 weeks, all GBP movements have been based on Brexit developments. The rejection of snap elections, ‘hard’ Brexit risk and the null and void’ declaration of prorogation of Parliament have created a ‘strengthening’ scenario in the GBP as ‘perceived risks’ have diminished. However, Brexit is anything but a ‘diminishing’ risk, a hard
READ MORE‘A hawkish cut’, ‘dovish upgrades’ and ‘potential non-movement’ – the oxymorons are strong in policy speak currently. Over the past week four G10 currency central banks have moved rates, three cut, one hiked.Which leads us to review the outlooks for certain currencies and assess our overall playbook.In the world of FX all reviews should start with
READ MOREIn the increasingly risky FX landscape single pair/cross risk may no longer be the best option to trade due to gapping and being stopped out. We only have to look back at the month of August to see this kind of risk playing out. EUR, GBP, AUD, NZD and the Scandinavian currencies all took a
READ MORERisk-off remains the ‘base case’ of my FX thinking. Volatility is the highest it’s been in 2019 as the sporadic nature of geo-politics coupled with a backdrop of a slowing global economy has created a perfect FX risk caldron and one that has us looking at XAU and crosses that are long JPY. EURJPY remains
READ MOREFX has been rocked by the ramp-up in action of the US-China trade war. The fact the PBoC is now willing to use the RMB as a mechanism to counter-tariffs is a new dimension for markets. It also shows that the FX market has now become a ‘battle ground’ and thus risk and commodity currencies
READ MOREEveryone is talking about the ‘hawkish cut’ and the reweighting taking place in FX. The strength of the USD should not be underestimated, it has seen GBP, AUD, EUR and NZD get pounded to multi-year lows. It was even more painful when you factor in Powell’s testimony; his bumbling and inability to clarify the Board’s
READ MOREOur USD thesis is very much holding true. In fact, the fait accompli around the cut to the Federal Funds Rate has been strengthened further by several events of the past week. These been:– New York President John Williams confirming that its ‘better to take preventative measures’– Vice Chair Richard Clarida followed this comment in an
READ MOREThe USD, from a market perspective anyway, is facing in a very dovish set up; and that’s despite last week’s strong non-farm payrolls (NFP). The NFPs certain throw out a red herring, its strength saw pairs whipsawing away from trend and did in fact knock out a previous trade idea in USD/JPY by hitting our
READ MOREDisclaimer: This material contains information from external sources and is intended for education and general information only. It does not constitute financial advice nor does it take into account your investment objectives, financial situation or particular needs. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice.
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