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US Dollar and Pound May Rise on Fischer, Carney Commentary

US Dollar and Pound May Rise on Fischer, Carney Commentary

Ilya Spivak,

Talking Points:

  • Hawkish Tone from Fed VC Fischer to Lift US Dollar, Fuel Risk Aversion
  • Pound May Rise as Comments BOE Governor Carney Boost Rate Hike Bets
  • Gauge Trends and Spot Reversals in Leading Currencies with DailyFX SSI

A relatively quiet economic data docket puts central bank commentary in the spotlight in European and US trading hours. Comments from Fed Vice Chair Stanley Fischerought to be particularly interesting because he tends to reflect the middle-ground consensus on the policy-setting FOMC committee. Rhetoric hinting the central bank will look past recent market turmoil to press on with rate hikes may boost the US Dollar and fuel risk aversion.

BOE Governor Mark Carney is also scheduled to speak. Investors will parse his remarks to gauge policymakers' confidence in overcoming imported disinflation from the Eurozone to raise rates in 2016. A recent dovish shift in market expectations suggests surprise risk is tilted on the upside for the British Pound in the event that Carney strikes a hawkish chord, clashing with the priced-in outlook and forcing re-positioning.

The sentiment-linked Australian and Canadian Dollars underperformed while standby funding currencies – the Euro, Yen and Swiss Franc – traded higher amid risk aversion in overnight trade. Japanese markets opened for the week having been closed for a holiday on Monday and took their turn to price in the same negativity that punished other regional bourses yesterday. This dragged down regional equities performance and echoed in currency markets.

Losing Money Trading Forex? This Might Be Why.

Asia Session

GMTCCYEVENTACTEXPPREV
22:30AUDWeekly Consumer Confidence Index (JAN 10)114.1-116.3
23:50JPYBoP Current Account Balance (NOV) (¥)1143.5B895.0B1458.4B
23:50JPYBoP Current Account Adjusted (NOV) (¥)1423.5B1512.9B1493.7B
23:50JPYTrade Balance BoP Basis (NOV) (¥)-271.5B-158.7B200.2B
23:50JPYBank Lending Incl Trusts (YoY) (DEC)2.2%-2.3%
23:50JPYBank Lending Ex-Trusts (YoY) (DEC)2.2%2.3%2.3%
00:00NZDANZ Commodity Price (DEC)-1.8%--5.6%
00:01GBPBRC Sales Like-For-Like (YoY) (DEC)0.1%0.5%-0.4%
00:30AUDCredit Card Balances (NOV) (AUD)51.3B-50.6B
00:30AUDCredit Card Purchases (NOV)25.6B-24.8B
05:00JPYConsumer Confidence Index (DEC)42.742.542.6
06:00JPYEco Watchers Survey Current (DEC)48.746.646.1
06:00JPYEco Watchers Survey Outlook (DEC)48.248.048.2

European Session

GMTCCYEVENTEXPPREVIMPACT
09:30GBPIndustrial Production (MoM) (NOV)0.0%0.1%Medium
09:30GBPIndustrial Production (YoY) (NOV)1.7%1.7%Medium
09:30GBPManufacturing Production (MoM) (NOV)0.1%-0.4%Medium
09:30GBPManufacturing Production (YoY) (NOV)-0.8%-0.1%Medium
10:30EURECB’s Praet Speaks in Paris --Low
10:30USDFed Vice Chair Fischer Speaks in Paris --High
11:00USDNFIB Small Business Optimism (DEC)95.094.8Low
14:15GBPBOE Governor Carney Speaks in Paris --High
15:00GBPNIESR GDP Estimate (DEC)-0.6%Medium

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EUR/USD1.06481.07701.08151.08921.09371.10141.1136
GBP/USD1.43271.44371.44901.45471.46001.46571.4767

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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