Week Ahead: Central Bank fallout, more pain for the Pound, and inflation data
Will this week be a volatile and chaotic as last week? Will markets continue with last week’s trend, or will there be profit taking along the way?
Gold falls below $1650 as US Dollar soars
Recession fears are causing both GBP/USD and EUR/USD to move lower. As a result, the US Dollar is moving higher. This leaves traders nervous to buy the dip in Gold as it moves to its lowest level since April 2020.
SNB hikes 75bps, but Franc’s not satisfied
The SNB hiked rates by 75bps today. However, the inconspicuous comments by the central bank left EUR/CHF weary as to if there are more to come.
Bank of England hikes rates by 50bps; More to come?
Despite a rate hike by the BOE of 50bps, GBP/USD is near 37-year lows. Why? Because the Fed hiked rates by 75bps yesterday and said that more rate hikes are on the way.
FOMC as expected; markets extremely volatile during presser.
As for other central bank meetings: within the next 20 hours markets will hear from the BOJ, SNB, Norges Bank, BOE, and SARB.
US Dollar Index reaches highest level since June 2002 ahead of the Fed
Be wary of a “Buy the rumor, sell the fact” trade in the US Dollar after the Fed’s decision later today.
Sweden’s Riksbank hikes rates 100bps, but the Krona doesn’t care!
The Riksbank feels like it got burnt one to many times by not raising interest rates enough. Therefore, it raised rates by 100bps today and said there is more to come.
Canadian CPI lower than expected. Are the BOC rate hikes working?
CPI for August out of Canada was lower than expected. As a result, EUR/CAD is trading higher on the day.
Is USD/CAD ready to pull back?
With significant resistance above, the chance of stronger than expected inflation data, and the possibility of a “less hawkish than expected” Fed, it Is possible that the pair will move lower.
Currency pair of the week: GBP/USD
With both the FOMC and the BOE meetings this week, GBP/USD could be in for quite a bit of volatility.
Michigan Consumer Sentiment data as expected. The table is set for the FOMC!
The FOMC meets on Wednesday and is likely to lift the Fed Funds rate by 75bps from 2.5% to 3.25%.