Weekly Trading Forecast: FX Markets Brace for US GDP, NFPs and FOMC Decision
There was little in the backdrop that should have meaningfully bolstered the US Dollar. Interest rate expectations measured through yields and Fed Fund futures were stagnant.
While policymakers have long-indicated that they want to wait until the stress tests conclude in the fall before introducing anything major, only a continued slog through the growth rut would prompt additional dovish action. The time for more action may be nearing, and the speculation is hurting the Euro.
New Zealand Dollar selling may continue after last week’s aggressive decline as sentiment trends take the reins from RBNZ monetary policy considerations.
The GBP/USD looks poised to resume the bullish trend carried over from the previous year as the Bank of England (BoE) shows a greater willingness to normalize monetary policy sooner rather than later.
The Australian Dollar may remain elevated with an absence of major domestic data ahead to shift policy bets alongside the prospect of continued carry demand.
Gold prices are softer on the week with the precious metal off by 0.51% to trade at $1298 ahead of the New York close on Friday.
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