Central Banks : change afoot or tempering risk ?

For years the greenback has benefited from a divergence between the Federal Reserve’s move to higher rates — including to rate hikes this year — and other regions. But analysts said the mood is changing.

“A game changer of a week as hawkish central bank commentary steamrolled the markets,” said Stephen Innes, senior trader at OANDA.

“Traders are now contemplating who will be next to join the lineup. No one wants to miss out on this party realising there’s a co-ordinated policy shift afoot and the chance to catch the removal of an easing bias is far too seductive for traders to ignore.”

Talk of tighter ECB rates has pushed the euro to more than one-year highs while the pound has also benefited, despite political uncertainty in Britain. Both currencies dipped in Asia but held on to most of their recent gains.

 

AFP

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes