IronFX Daily Commentary by Sakis Paraskevov | 18/11/2015
November 18, 2015 9:48 am
Main points for Today
• Dollar index soars to its highest level since mid-April • The dollar stayed near a 7-month high against a basket of currencies after the US CPI data for October supported the case for a December rate hike. • In the wake of the encouraging US employment report for October, the unexpected rise in the CPI kept USD in a rising mood. The greenback has become largely data-driven and further improvement in the fundamentals are likely to boost it further. • Fed’s October meeting minutes what to watch • Overall, the minutes are expected to mirror the statement accompanying the decision and suggest that December liftoff is “alive”. This could support the dollar. • However, if Fed officials’ emphasize that USD strength might continue to be a drag on growth, we could see the greenback losing some of its steam. • Another key point will be the discussion on the pace of rate increases following the first hike. Fed members’ have repeatedly emphasized that they will take a gradual approach. As such, they may retain their data-dependence after the liftoff to avoid undue market turmoil. • Today: • ECB non-monetary policy meeting: Even though this meeting may pass unnoticed, given the recent reference from ECB’s Peter Praet that the Bank may discuss whether there is a case for further easing, EUR could remain sensitive on any headlines coming out. • US: Housing starts and building permits for October. These data are likely to confirm the overall strength in the housing sector and could support USD. • Speakers: ECB Executive Board members Sabine Lautenschlager and Yves Mersch, while from the Fed, Cleveland Fed President Loretta Mester, New York Fed President William Dudley and Atlanta Fed President Dennis Lockhart.
Main points for Today
• Dollar index soars to its highest level since mid-April
• The dollar stayed near a 7-month high against a basket of currencies after the US CPI data for October supported the case for a December rate hike.
• In the wake of the encouraging US employment report for October, the unexpected rise in the CPI kept USD in a rising mood. The greenback has become largely data-driven and further improvement in the fundamentals are likely to boost it further.
• Fed’s October meeting minutes what to watch
• Overall, the minutes are expected to mirror the statement accompanying the decision and suggest that December liftoff is “alive”. This could support the dollar.
• However, if Fed officials’ emphasize that USD strength might continue to be a drag on growth, we could see the greenback losing some of its steam.
• Another key point will be the discussion on the pace of rate increases following the first hike. Fed members’ have repeatedly emphasized that they will take a gradual approach. As such, they may retain their data-dependence after the liftoff to avoid undue market turmoil.
• Today:
• ECB non-monetary policy meeting: Even though this meeting may pass unnoticed, given the recent reference from ECB’s Peter Praet that the Bank may discuss whether there is a case for further easing, EUR could remain sensitive on any headlines coming out.
• US: Housing starts and building permits for October. These data are likely to confirm the overall strength in the housing sector and could support USD.
• Speakers: ECB Executive Board members Sabine Lautenschlager and Yves Mersch, while from the Fed, Cleveland Fed President Loretta Mester, New York Fed President William Dudley and Atlanta Fed President Dennis Lockhart.
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