The US Dollar gapped open at the start of the week but has not found much follow-through since then. Following a barrage of positive data, the Australian Dollar struggled to hold on to more gains as the RBA left rates unchanged and reiterated that inflation will pickup gradually. The Australian Dollar gained as retail sales data caught the eyes of traders rather than some trade figures. But why did traders place bets ahead of the RBA decision?
Both the Australian and the New Zealand Dollars rose on Tuesday morning, but their sources of support varied. The RBNZ seems resistant to any formal mandate changes. The news wire remains the most potent source of event risk for the major currencies at the start of the week. The latest Euro-Zone Sentix indicator slips lower, breaking the recent uptrend, with Germany for once leading the way lower. The US Dollar held up on news that major US tax reform had taken another step toward the statute book.
Data-starved equity traded on more local factors. The passage of a US tax cut plan in the US senate and signs of progress in Brexit negotiations have financial markets in a cheery mood at the start of the trading week. The British Pound has had a strong run this year as a Brexit agreement has appeared to edge closer. However, there are too many hurdles still to jump and a heavy fall is overdue.
Equity markets hit a stretch of volatility last week, events and technicals both favor more in the week ahead.
Yuan may benefit from eased capital outflows, while suffer from trade tensions between the U. Oil prices ran-higher this week as expectations continue to build for an extension of production cuts out to the end of next year. The upcoming Thanksgiving holiday in the United States means both the economic calendar and market liquidity will be thinning out over the coming days. The Euro has been the best-performing currency in while the British Pound has languished in a choppy range. Both currencies may face selling pressure in the months ahead.
The Japanese Yen as well as the Aussie and Kiwi Dollars spent much of driven by US events will probably offer more of the same, at least in its early months. With the major central banks quickly approaching their last interest rate decisions for , fresh remarks from monetary policy officials may impact the FX market.
What Else Before ? From a volatility accident to SNB flashbacks, these are some of the unexpected pitfalls that may strike the financial markets before year-end. Volatility has struggled at extremely low levels for a remarkably extended period of time. This is an extreme that will inevitably end, with considerable bravado in the markets. Global stocks put in the first notable pullback in months as reports of a delay to US tax cuts tempered recent bullish behavior.
Is this the shift that will ultimately bring on reversal of years-old trends? Move Back Below 1. Click here to dismiss. Upcoming Events Economic Event. Forex Economic Calendar A:More...