USD: The US Dollar has recouped a lot of yesterday’s losses as eyes flip in direction of the FOMC price resolution. The central financial institution is anticipated to chop rates of interest to 1.75-2.00%, nonetheless, with this priced in, focus will shift in direction of dot plot and the accompanying commentary. Alongside this, a lot of the eye could be positioned on the potential response to the latest surge in repo charges, which yesterday prompted the central financial institution to hold out an open market operation for the primary time because the GFC.
GBP: Sterling pulled away from the 1.2500 deal with following the most recent inflation knowledge, which dropped to 1.7% (Exp. 1.9%) with the ONS highlighting that the drop had been primarily pushed by a lower in pc recreation costs, plus clothes costs rising by lower than final 12 months after the tip of the summer season gross sales. However, whereas this can be the bottom degree since December 2016, the determine continues to be above the 1.6% that the BoE has forecasted. That stated, the central financial institution is prone to pay better consideration to UK wages, that are hovering round a submit disaster excessive. Nonetheless, the BoE will stand pat as Brexit uncertainty continues to tie the arms of the central financial institution.
CAD: Muted response to the CPI knowledge, which regardless of the drop within the headline, the BoC’s most popular measure of inflation is bang on 2%. As such, the is prone to endorse the BoC’s wait-and-see stance, due to this fact exterior components, most notably oil costs are prone to drive the Canadian Dollar.
WHAT’S DRIVING MARKETS TODAY
- “GBPUSD Price Slips Lower as UK Inflation Falls to a Near Three-Year Low” by Nick Cawley, Market Analyst
- “Gold Price Outlook at a Crossroads, Make or Break Time” by Paul Robinson, Currency Strategist
- “USD/CAD, AUD/USD Volatility Soars on Federal Reserve Rate Decision Risk” by Justin McQueen, Market Analyst
- “Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor
— Written by Justin McQueen, Market Analyst
To contact Justin, electronic mail him at Justin.firstname.lastname@example.org
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