Talking Points:
- US Dollar Down After Fed Vice Chair Fischer Hedges 2015 Rate Hike Bets
- Fed-Speak Remains in Focus Ahead, Brainard Commentary May Stand Out
- See Economic Releases Directly on Your Charts with the DailyFX News App
The US Dollar traded broadly lower following comments from the Federal Reserve’s Stanley Fischer over the weekend. While the Vice Chair repeated the now-familiar forecast of a rate hike in 2015 – a view apparently shared by most on the FOMC but largely dismissed by the markets – he went to great lengths to hedge the bet.
Fischer said “considerable uncertainties” surround the economic outlook and warned that liftoff timing is an expectation, not a commitment. Traders appeared to interpret the remarks as validation of a dovish shift in the priced-in outlook that now envisions a hike no sooner than March 2016.
Looking ahead, Fed-speak will remain at the forefront. Atlanta and Chicago Fed Presidents Dennis Lockhart and Charles Evans as well as Governor Lael Brainard are due to speak. While markets have already heard plenty from Lockhart and Evanssince September’s FOMC meeting, Brainard’s policy views remain somewhat mysterious. This mightsee investors paying particular attention to her remarks.
A strongly-worded call for a 2015 hike may offer a bit of a lifeline to the greenback in the near term. The markets’ general skepticism toward hawkish Fed rhetoric in recent weeks suggests upside follow-through will be hard to come by without concrete, data-driven evidence. The soonest opportunity to see something like that looks to be Wednesday’s US Retail Sales report.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:00 | NZD | REINZ House Sales (YoY) (SEP) | 38.3% | - | 41.7% |
| 00:30 | AUD | Credit Card Purchases (A$) (AUG) | 24.4B | - | 24.7B |
| 00:30 | AUD | Credit Card Balances (A$) (AUG) | 50.6B | - | 50.5B |
European Session
| GMT | CCY | EVENT | EXP/ACT | PREV | IMPACT |
|---|---|---|---|---|---|
| 07:00 | CHF | Total Sight Deposits (OCT 9) | 465.3B (A) | 465.3B | Low |
| 07:00 | CHF | Domestic Sight Deposits (OCT 9) | 401.2B (A) | 399.2B | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EURUSD | 1.1097 | 1.1217 | 1.1288 | 1.1337 | 1.1408 | 1.1457 | 1.1577 |
| GBPUSD | 1.5169 | 1.5252 | 1.5287 | 1.5335 | 1.5370 | 1.5418 | 1.5501 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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