News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/uf6KEYTes5
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/gRjdVfbg66
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/mLLGqYUygY
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/HUYJzEkYiT
  • #Gold prices put in a major breakout last month and, so far, buyers have held the line. But a really big Fed meeting is on the calendar for this week. Can Gold bulls hold? Get your market update from @JStanleyFX here: https://t.co/NGRTSfceOW https://t.co/QkSUORIQE2
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/PHK2sqB1jV
  • Top event risk for more than just the Dow and Dollar this week is the Wednesday #FOMC rate decision. What the markets expect sets the tone for how the event impacts price action. My run down of the week and Fed decision: https://www.dailyfx.com/forex/video/daily_news_report/2021/06/12/Dollar-and-SP-500-Breaks-Must-Abide-the-FOMC-Decision-This-Week.html https://t.co/Huvth4f706
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/AkE7bFRWAt
  • $GBPUSD continues to trade in ranges as volatility dwindles. UK data to play second fiddle to FOMC. Get your market update from @JMcQueenFX here: https://t.co/T0Eg4KaENB https://t.co/GMmZa5L0Il
  • Get your snapshot update of the of market open and closing times for each major trading hub around the globe here: https://t.co/BgZLFljIhZ https://t.co/wlGgQrcK3X
Will the Pound's Brexit Woes be Overshadowed by CPI, Implications for BOE Policy?

Will the Pound's Brexit Woes be Overshadowed by CPI, Implications for BOE Policy?

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- UK inflation tops +3% year-over-year, essentially locking in a BOE rate hike next month.

- US Dollar sees a barren economic calendar ahead of it the next few days.

- Retail trader sentiment suggests the near-term outlook for the US Dollar is neutral.

Upcoming Webinars for Week of October 15 to October 20, 2017

Wednesday at 6:00 EDT/10:00 GMT: Mid-Week Trading Q&A

Wednesday at 7:00 EDT/11:00 GMT: Is Bitcoin in a Bubble? Short and Long-term Crypto Perspectives

Thursday at 7:30 EDT/11:30 GMT: Central Bank Weekly

See the full DailyFX Webinar Calendar for other upcoming strategy sessions

The British Pound has had a volatile past two weeks, thanks mainly due to a wave of unsettling news surrounding UK Prime Minister Theresa May’s leadership and her government’s ham-fisted handling of the Brexit negotiations.

Quietly, amidst the noise, BOE rate hike expectations have been slowly pricing in a greater likelihood of a 25-bps rate hike at the BOE’s November meeting. At the beginning of the week of the BOE’s September policy meeting, rates markets were pricing in approximately a 20% chance of a move in November; at the end of that week, odds were near 65% and GBP/USD was near 1.3600.

Now, even though GBP/USD is closer to 1.3200, rate hike odds have tightened up to a 75% chance of move. With the September UK CPI report having been released earlier today and showing headline inflation at +3% y/y, a shift in the market’s focus from the GBP-negative Brexit news flow to the GBP-positive inflation picture and its implications on incoming BOE monetary policy should limit Sterling losses in the near-term.

Chart 1: DXY Index Daily Timeframe (May to October 2017)

Will the Pound's Brexit Woes be Overshadowed by CPI, Implications for BOE Policy?

Elsewhere, the US Dollar is gaining ground today, holding the uptrend from the September swing lows in the DXY Index in the process. But the past two weeks have been anything but easy for the greenback. The US Dollar was riding high coming into October thanks to Fed rate hike expectations sharply repricing the odds of a move in December.

Yet since Friday, October 6, nothing seemingly has gone right: the headline US Nonfarm Payrolls report posted its first negative reading in seven years; US President Trump’s tax reform plan hit a wall amid more infighting in the Republican Party; and the September US CPI report reinforced the growing notion that persistent readings below the Fed’s medium-term +2% target may be structural rather than transitory – a feature, not a bug, of the US economy in 2017 and beyond.

Recall that CPI rose +0.5% vs 0.6% exp (m/m) and the +2.2% vs +2.3% exp (y/y). The Core readings (ex-food and energy) also missed expectations. A speech by Fed Chair Janet Yellen at the end of the coming week is the only event on the DailyFX Economic Calendar that warrants a ‘high’ importance tag, rendering the US Dollar’s fate in the next few days subject to the tonality of comments from Fed speakers rather than data.

Read more: FX Markets Turn to Inflation Data from New Zealand, the UK, and Canada

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES