USD on the Back Foot Again

Central Bankers in Focus on Monday

It’s been a relatively slow start to what is otherwise likely to be a busy week for the markets, with appearances from prominent central bankers being accompanied by numerous data releases.

As is so often the case, Monday is looking a little quiet compared to what is to come although we will hear from two notable central bankers – FOMC voter Neel Kashkari and Bank of England Chief Economist Andy Haldane. Kashkari is arguably the most dovish of the current crop of voters on the FOMC and has been open about his objection to further rate hikes which would suggest he’s preparing to dissent at the meeting in December, when the central bank is expected to raise interest rates. I would expect him to remain of this opinion when he speaks today.

Haldane on the other hand was one of those on the Monetary Policy Committee that backed a rate hike having not done so previously and it will be interesting to see whether he supports the current outlook of two of the next few years, or whether he feels further action is warranted in the more immediate future. I imagine Haldane will take a more conservative approach once again, with the recent hike having come at a very uncertain and difficult time for the UK economy.

US equity markets are poised to open a little higher again on Monday after having recovered in the latter part of last week to trade back at record highs. A strong showing for online retailers on Black Friday may have boosted sentiment, with Cyber Monday having the potential to be even better in a sign that the consumer is healthier than other numbers this year have indicated. New home sales from the US will also be in focus today.

Dollar Index Remains Under Pressure

Source – Thomson Reuters Eikon

The US dollar is starting the week on the back foot again after coming under significant pressure in the latter part of last week. While progress is being made on tax reforms, traders may well be doubting how quickly they will be enacted and how significant the final draft will be for the economy and therefore interest rates.

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.