Sitting Tight awaiting the FOMC
The markets are sitting tight waiting for the Fed decision, but more so Dr. Yellen’s forward outlook and, of course, the accompanying statement. As is the case with most Fed” pressers”, it will mainly involve deciphering the Feds verbal gymnastics while looking for a smoking gun – tonight’s smoking gun will be in the form of a hawkish or dovish Fed lean.
The positive data from China yesterday with moth Retail Sales and Industrial Production coming in higher than expected as the market is heading into yearend with a rather upbeat view of Mainland’s growth story but the Aussie continues to struggle above the .7500. The fly in the ointment is the weaker run of Aussie economic data, and with dealers shifting attention to tomorrow’s Aussie Jobs Report, traders are concerned that the current rush towards part-time workforce at the expense of the Full-time employment numbers, could eventually be a concern for the RBA if the current trend intensifies
While I maintain external drivers will continue to dominate the overall Aussie dollar landscape, it is important for dealers to confirm the current trend moves are supported by domestic economic prints, especially when closing in on the primary resistance levels. ( .7500-.25)
Despite US bond yields trading marginally lower, the USDJPY remains supported by the Santa Claus rally in equity markets and the latest musings from the Bank of Japan, who will extend the deadline for its industrial loan program, emphasising the Central Bank’s commitment to economic expansion.
With capital outflow headlines grabbing all the attention, it was great to see more positive data out of China, the highlight of yesterday’s session. The data failed to generate significant price action, yet the run of positive economic data supports the markets renewed optimism regarding Mainland’s economy.
While not a game changer in the currency markets, it is Yuan supportive nonetheless.
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.