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US Dollar May Rise as Fed-Speak Fuels Rate Hike Speculation

US Dollar May Rise as Fed-Speak Fuels Rate Hike Speculation

Talking Points:

  • US Dollar may advance as Fed-speak stokes rate hike speculation
  • Pound gains after Hammond argues for City of London status quo
  • Yen correcting higher after yesterday’s broad-based down move

A relatively uneventful European data docket shifts the spotlight to comments from Boston and Dallas Fed Presidents Eric Rosengren and Robert Kaplan in the final hour of the trading week. Traders are almost certainly eager to onboard the last bits of guidance before the two-week blackout period ahead of this month’s FOMC meeting. Hawkish posturing in line with recent remarks from other US central bank officials may boost rate hike speculation, sending the US Dollar higher.

The Japanese Yen outperformed in overnight trade, trading broadly higher in a move that appeared to be corrective after the currency lagged its major counterparts in the prior session. The British Pound continued to recover from selling pressure that plagued the UK unit through most of yesterday’s European session. Losses appeared to accelerate in the run-up to testimony from Chancellor Philip Hammond before the House of Lords Economic Affairs Committee.

Concerns about the post-Brexit future of the City of London as regional financial hub seemed to be front and center for investors. Sterling bottomed and began to recover as Hammond spoke, possibly reflecting the government’s apparent commitment to defend the status quo. The Chancellor said the City supports the real economy across Europe and breaking it up – including the splitting up of clearing services – would be a mistake for the EU.

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Asia Session

22:45NZDCard Spending Retail (MoM) (AUG)-0.4%0.3%0.2%
22:45NZDCard Spending Total (MoM) (AUG)-0.8%-0.3%
23:50JPYMoney Stock M2 (YoY) (AUG)3.3%3.3%3.4%
23:50JPYMoney Stock M3 (YoY) (AUG)2.8%2.9%2.9%
1:30CNYCPI (YoY) (AUG)1.3%1.7%1.8%
1:30CNYPPI (YoY) (AUG)-0.8%-0.9%-1.7%
1:30AUDHome Loans (MoM) (JUL)-4.2%-1.5%1.7%
1:30AUDInvestment Lending (JUL)0.5%-3.3%
1:30AUDOwner-Occupier Loan Value (MoM) (JUL)-3.1%-1.6%
4:30JPYTertiary Industry Index (MoM) (JUL)0.4%0.8%

European Session

5:45CHFUnemployment Rate (AUG)3.2% (A)3.1%Medium
5:45CHFUnemployment Rate SA (AUG)3.4% (A)3.3%Medium
6:00EURGerman Trade Balance (JUL)19.5b (A)24.7bMedium
6:00EURGerman Current Account Balance (JUL)18.6b (A)26.3bMedium
6:00EURGerman Exports SA (MoM) (JUL)-2.6% (A)0.2%Low
6:00EURGerman Imports SA (MoM) (JUL)-0.7% (A)1.1%Low
8:30GBPVisible Trade Balance (£/Mn) (JUL)-11650-12409Medium
8:30GBPTrade Balance Non EU (£/Mn) (JUL)-3600-4159Low
8:30GBPTrade Balance (£/Mn) (JUL)-4200-5084Low
8:30GBPConstruction Output (MoM) (JUL)-0.5%-0.9%Low
8:30GBPConstruction Output (YoY) (JUL)-3.4%-2.2%Low
8:30GBPBoE/TNS Inflation Next 12 Mths (AUG)-2.0%Low

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3

--- Written by Ilya Spivak, Currency Strategist for

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