Trading Video: Central Bankers to Weigh On Dollar, Euro, Pound Trends Today
• The 'risk trends' theme may hold the best potential, but monetary policy is the most proactive driver
• At the extremes, the ECB and BoJ are most dovish while the other side is lead by the Fed and BoE
• Today's docket is heavy with high profile central bank testimony that can feed the relative policy
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The specter of unified speculative appetite trends have not materialized in a meaningful way in some time. In its absence, divergent monetary policy themes have stepped in to drive exceptional trends in the FX market. A seven-month rally for the Dollar, a 22 percent EURUSD drop since May and surge and collapse for GBPUSD the past 18 months have all developed on the basis of changes in stimulus or rate forecasts. To perhaps revive the recently sidelined motivation in these substantial trends, the upcoming docket offers key updates from policy groups from the US (Fed Chair Yellen's Senate testimony), the UK (BoE Governor Carney and MPC members Parliamentary testimony) and Eurozone (ECB President Draghi speech). We discuss the prevailing themes and the potential for unleashing pent up pressure in today's Trading Video.
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