Weekly Trading Forecast: Where to for FX Market after Fed and BoJ Adjust, Volatility Cools?
We have passed two weeks of fireworks in volatility and event risk. Will conditions simply settle as they did in July and August; or has a permanent shift been put into motion?
The Federal Reserve announced to the market a ‘hawkish hold’ at its policy gathering this past week, and in turn offered little resolution to the market’s conflict over the Dollar’s current richness or cheapness.
Without exogenous interference from the Bank of Japan and the Federal Reserve, the Euro should be driven by factors more closely related to home, in particular, proving sensitive around the nine speeches by ECB policymakers between Monday and Thursday.
With a slew of Federal Reserve officials scheduled to speak throughout the last full-week of September, the fresh batch of central bank rhetoric may generate new monthly lows in GBP/USD should they boost market expectations for a 2016 rate-hike.
The Chinese Yuan will officially join the SDR basket as the fifth reserve currency on October 1st. This will likely be the dominant theme for all Yuan pairs in the coming week.
Gold prices are markedly higher this week with the precious metal up 2.26% to trade at 1339 ahead of the New York close on Friday.
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