Markets

US Dollar May Rise as Fed-Speak Fuels Rate Hike Speculation

DailyFX.com -

Talking Points:

  • US Dollar may advance as Fed-speak stokes rate hike speculation
  • Pound gains after Hammond argues for City of London status quo
  • Yen correcting higher after yesterday's broad-based down move

A relatively uneventful European data docket shifts the spotlight to comments from Boston and Dallas Fed Presidents Eric Rosengren and Robert Kaplan in the final hour of the trading week. Traders are almost certainly eager to onboard the last bits of guidance before the two-week blackout period ahead of this month's FOMC meeting . Hawkish posturing in line with recent remarks from other US central bank officials may boost rate hike speculation, sending the US Dollar higher.

The Japanese Yen outperformed in overnight trade, trading broadly higher in a move that appeared to be corrective after the currency lagged its major counterparts in the prior session. The British Pound continued to recover from selling pressure that plagued the UK unit through most of yesterday's European session. Losses appeared to accelerate in the run-up to testimony from Chancellor Philip Hammond before the House of Lords Economic Affairs Committee.

Concerns about the post-Brexit future of the City of London as regional financial hub seemed to be front and center for investors. Sterling bottomed and began to recover as Hammond spoke, possibly reflecting the government's apparent commitment to defend the status quo. The Chancellor said the City supports the real economy across Europe and breaking it up - including the splitting up of clearing services - would be a mistake for the EU.

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Asia Session

GMT CCY EVENT ACT EXP PREV
22:45 NZD Card Spending Retail (MoM) (AUG) -0.4% 0.3% 0.2%
22:45 NZD Card Spending Total (MoM) (AUG) -0.8% - 0.3%
23:50 JPY Money Stock M2 (YoY) (AUG) 3.3% 3.3% 3.4%
23:50 JPY Money Stock M3 (YoY) (AUG) 2.8% 2.9% 2.9%
1:30 CNY CPI (YoY) (AUG) 1.3% 1.7% 1.8%
1:30 CNY PPI (YoY) (AUG) -0.8% -0.9% -1.7%
1:30 AUD Home Loans (MoM) (JUL) -4.2% -1.5% 1.7%
1:30 AUD Investment Lending (JUL) 0.5% - 3.3%
1:30 AUD Owner-Occupier Loan Value (MoM) (JUL) -3.1% - 1.6%
4:30 JPY Tertiary Industry Index (MoM) (JUL) 0.4% 0.8%

European Session

GMT CCY EVENT EXP/ACT PREV IMPACT
5:45 CHF Unemployment Rate (AUG) 3.2% (A) 3.1% Medium
5:45 CHF Unemployment Rate SA (AUG) 3.4% (A) 3.3% Medium
6:00 EUR German Trade Balance (JUL) 19.5b (A) 24.7b Medium
6:00 EUR German Current Account Balance (JUL) 18.6b (A) 26.3b Medium
6:00 EUR German Exports SA (MoM) (JUL) -2.6% (A) 0.2% Low
6:00 EUR German Imports SA (MoM) (JUL) -0.7% (A) 1.1% Low
8:30 GBP Visible Trade Balance (£/Mn) (JUL) -11650 -12409 Medium
8:30 GBP Trade Balance Non EU (£/Mn) (JUL) -3600 -4159 Low
8:30 GBP Trade Balance (£/Mn) (JUL) -4200 -5084 Low
8:30 GBP Construction Output (MoM) (JUL) -0.5% -0.9% Low
8:30 GBP Construction Output (YoY) (JUL) -3.4% -2.2% Low
8:30 GBP BoE/TNS Inflation Next 12 Mths (AUG) - 2.0% Low

Critical Levels

CCY Supp 3 Supp 2 Supp 1 Pivot Point Res 1 Res 2 Res 3
EUR/USD 1.1162 1.1204 1.1222 1.1246 1.1264 1.1288 1.1330
GBP/USD 1.3123 1.3245 1.3293 1.3367 1.3415 1.3489 1.3611

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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