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Focus shift from FED to PBOC

As traders, we were told never to trade Friday the 13th. If we did, it was going to hurt. After yesterday’s short squeeze and Goldman’s revised one year EUR recommendation (1.40), the long dollar positions took it on the chin. Already this week the highly anticipated Fed minutes could not hold the line. Their lack of action or perception has only allowed the risk trading noose to tighten. The minutes confirmed that the Fed has little appetite to enter another round of full balance sheet expanding QE anytime soon, and this despite the recent loss of momentum in the pace of US recovery. The minutes also showed Fed officials reaching for new ways to help the economy. Several officials noted that it could be helpful “to explore the possibility of developing new tools to promote more accommodative financial conditions and thereby support a stronger recovery.” As the market takes its eyes off the Fed, the focus now switches to China and its rumors of further stimulus on the horizon.

Below are some other highlights of the week:


AMERICAS

 


EUROPE Week in FX

ASIA Week in FX [1]

 

WEEK AHEAD

  • Retail Sales comes to us from USD and GBP
  • Inflation indicators are delivered from NZD, GBP, USD and CAD
  • AUD and GBP both release their respective MPC meeting minutes
  • The BoC presents CAD’s rate announcement
  • EUR has German ZEW economic sentiment to contend with
  • Both GBP and USD has unemployment claims to ponder
  • Building and Home sales data is released in the US
  • The week finishes with USD Philly Fed index

 

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.

Dean Popplewell

Dean Popplewell [6]

Vice-President of Market Analysis at MarketPulse [7]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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