Weekly Trading Forecast: US and UK GDP Look to Charge Fed and Brexit Speculation
Volatility has picked up for the FX market these past weeks, but keeping the charge will require further fundamental winds. Will event risk like US and UK 3Q GDP readings step up the task?
The ICE Dollar Index (DXY) posted another impressive week’s advance through this past Friday. That marksthree consecutive weeks that the benchmark currency has climbed to eight-month highs – and at the fastest pace since the November rally back to 12-year highs.
As anticipated, the European Central Bank dispatched speculation that it was readying to taper its QE program, and instead has markets focused on its next major policy meeting in December.
The 3Q Gross Domestic Product (GDP) reports coming out of the U.K. and U.S. along with a fresh wave of central bank rhetoric may spur increased volatility in GBP/USD, but the pair may continue to consolidate within a narrow range as British Prime Minister Theresa May increases her efforts to avoid a ‘hard Brexit.’
while the Australian economy has now went 25 years without an actual recession, a lack of inflation as global growth has cooled has raised some very serious questions about sustainability of Australian growth.
The Canadian Dollar lost ground across the board last week as the fundamental hits keep coming. The Canadian Dollar fell to its lowest level since March 16 when the Federal Reserve dashed hopes of an interest rate hike in the near future to complement their December hike.
Gold priceswere on a firmer footing this week with the precious metal up 1.15% to trade at 1265 ahead of the New York close on Friday. The gains come despite continued strength in the greenback with the USDIndex (DXY) rallying back into the 2016 open at 98.69 (highest levels since February).
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