Forex

GBP/USD is down only modestly despite so much negative news...

The US Non-Farm Payroll data released this morning showed that 528,000 jobs were added to the economy during July. This is more then twice the estimate of 250,000.

In this week’s edition, we discuss the re-pricing of future rate hikes and potential for peak inflation, and how all this is helping to fuel a rally in zero- and low-yielding assets.

Will the USD/CZK continue to move higher? It could, however it may have to wait until after the July inflation reading next week.

If the Employment Change is better than expected, this will help give the BOC confidence to hike again when it meets in September.

…But there’s hope for GBP/USD bulls – the dollar and bond yields are weakening again.

Ahead of the BoE decision, the GBP/USD has established a base around low $1.20s.

The correlation between USD/JPY and 10-year yields has come back in line and is almost in “strong” territory on the daily timeframe.

If the data dump later comes out as expected, will the BOJ turn less dovish? It's unlikely.

The textbook definition of a recession is 2 quarters of negative growth. However, many economists don’t abide by that rule.

GDP was quite poor, so there won’t be a hattrick of 75 basis point hikes in September, that’s for sure.

Fundamental trends show no imminent signs of reversing, but CAD/JPY’s chart nonetheless suggests that there may be an opportunity for one or both of these currencies to reverse some of this year’s moves.

Interest rates are an important driver for forex markets so it’s important that traders understand the effects of hikes and cuts on currencies. Let’s look at how interest rates affect currencies and a popular forex interest rate trading strategy.

EUR/USD rises post-Fed, with German inflation, US GDP in focus. Barclays is down after H1 profits fall.

Several regional inflation report are released for Germany at 09:00 which ca provide a lead on what to expect for the German and eurozone inflation reports.

The increased inflation and fears of low supply of natural gas, combined with risk of a recession, are causing consumer sentiment in the Eurozone to fall to record lows.

We’ve noticed an interesting technical lsetup on USD/SGD, although with the FOMC meeting just hours away it could be a make or break moment for the setup.