Video: Dollar and Euro Feed Off Rate Expectations, Pound’s Turn?
• Following the drop in the Euro on Draghi comments, the Dollar rallied after Yellen kept December open
• The Bank of England rate decision and Quarterly Inflation report will offer the Pound rate speculation
• With the USDollar facing down major resistance, be cautious about projecting big moves for the majors
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Just as ECB President Draghi put the Euro back on pace the day before, Fed Chairwoman Yellen's comments drove the Dollar higher Wednesday. While her general view that December was still a 'live' opportunity for a rate hike is not new, it does contradict the intensified skepticism among the speculative ranks - and that is just as effective a market mover as a 'surprise'. However, with the USDollar still boxed in by 12-year highs, the bullish response from the Greenback doesn't open the door to a renewed trend. Market participants will be looking to a dense round of Fed speak ahead and Friday's labor report to offer stronger motivation. Meanwhile, the Pound is positioning itself for its own fundamental spark. Thursday's Bank of England rate decision will carry more weight than usual with the simultaneous release of the Quarterly Inflation report. Will the BoE trigger a big Pound move like the ECB and Fed have done to their respective currencies recently? We discuss this and more in today's Trading Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.