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Dean's Daily FX Update – 02 August 2017
In the Zone
- EURUSD
- GBPUSD
- AUDUSD
- NZDUSD
- USDCAD
- USDZAR
- ALSI
Noteworthy News
- After recent hawkish comments from global central banks, we have seen RBNZ this week push their expected hike cycle from November 2018 to February 2019. I suspect that in the coming months we could see all the central banks start to back track.
Recap
The new month started rather quietly with much of the pairs trading in tight ranges and the reason for any moves were largely driven by o t her factors. The EURUSD erased recent gains on falling bond yields, the USDCAD came under pressure because of the falling oil price and the NZDUSD crashed because of weak employment numbers. Traditionally both July and August are very range bound as the Northern Hemisphere enjoys what’s left of summer, July was extraordinarily volatile because of political turmoil surrounding the White House.
With congress on recess for the month, I hope that the market can get back to trading technical levels as opposed to fundamentals. I suspect that with all the hawkish comments coming out of global central banks that the Jackson Hole meeting in late August could become a major market mover this year. All this hawkish talk has put a dampener on the greenback, but I have been drumming on that there is a difference between talking about hiking rates and actually doing it – and until now only the Fed have put their money where their mouth is. I have a gut feeling that this meeting may prove to be the equalizer this year and what allows the dollar to bounce.
As the market braces itself for NFP on Friday, I am keeping an eye on all the major pairs this morning. As we discuss in the video it does seem as though the dollar – barring any ridiculous tweets from Trump – is braced to force a correction any day now, and considering the last couple of months, I don’t want to miss out on that move.
I have got my eye on both the metals and oil, and in turn I will be keeping an eye on the commodity currencies over the next couple of weeks as I believe that is where we could see some opportunity.
Keep an eye out for the afternoon video that tries to tie everything together.
Important Economic Data out today
10:30 GBP Construction PMI
Consensus: 54.3
Effect: Actual higher than expected is good for the GBP
14:15 USD ADP Non-Farm Employment Change
Consensus: 187K
Effect: Actual higher than expected is good for the USD
16:30 USD Crude Oil Inventories
Consensus: -3.2%
Effect: No consistent effect on the USD
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