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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?
GBP/USD freefall: Where will it stop?
The 1985 low in the 1.0500 area could beckon in due time, but given the deeply oversold reading on the 14-day RSI, we would expect a short-covering bounce before then...
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.
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Forex Friday: USD, GBP, TRY, CHF and JPY
In this week’s edition, we discuss the dollar’s latest big gains following this week’s central bank meetings, among other things.
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.
USD/JPY dives but is government intervention effective?
Is the BoJ undoing the government’s attempt to shore up the yen?
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.
European Open: Implied volatility spikes, BOJ gets active ahead of FOMC
Rising yields ahead of the FOMC meeting has seen the BOJ announce bond purchases, and implied volatility has risen notably for the next 24-hours.
The SNB could surprise (again) with a larger than expected hike
The SNB (Swiss National Bank) are expected to hike interest rates tomorrow, which would send their rate above zero for the first time since 2011.
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.
GBP/USD: Why pound parity (1.00) is a potentially plausible prospect
The eerie similarities to the mid-1980s hint that GBP/USD could fall toward parity (1.00) in the coming quarters...
US open: Stocks drop on Fed jitters
Stocks head lower as nerves set in ahead of the Fed's rate decision tomorrow and after the Swedish central bank hiked rates by 1%, ahead of forecasts.
Technical Tuesday: S&P, gold, USD/CAD and AUD/NZD
In this week’s edition, we are getting technical on S&P 500, gold, USD/CAD and AUD/NZD
Two trades to watch: DAX, USD/CAD
Dax rises despite record PPI. USD/CAD edges higher ahead of Canadian inflation.
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European Open: CAD/JPY holds steady ahead of Canada’s CPI report
CAD/JPY has pulled back to a pivotal support level, and today’s inflation report from Canada could make or break it.
RBA Meeting Minutes continue to point to a slowing of RBA rate hikes and what next for the AUDUSD
The focus this morning for local markets has been on the RBA Board meeting minutes for September and for possible clues it contained as to the Board’s view around the pace of future interest rate hikes.
Japan’s Inflation is doing its thing, but don’t expect the BOJ to act
Inflation rose to an 8-year high (or a 31-year high if we look past tax-hike impacts), yet its unlikely to see the BOJ shift from their ultra-dovish policy this week.
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.
Commitment of traders report (COT): Bears are aggressively short T-notes
Traders aren’t shying away from shorting bonds, with large speculators having their most bearish view since April 2021.