Does Good or Bad Data Leverage More Dollar, Pound Reaction?
• Markets don't always react to data and fundamentals as the textbooks would suggest
• One big foil in the market impact currently is how event risk shapes monetary policy expectations
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Why is it that an inflation figure can generate a stronger response from a currency or equities market than a more comprehensive indicator like GDP? Why do 'good' outcomes generate far less volatility than an equivalent 'bad' result in some situations and the opposite in others? Fundamentals is not a fixed analysis as it is given context by what matters most to the market at large. We have discussed this directly and indirectly in previous videos and webinars, but we revisit this concept in today's Strategy Video with an eye to the two most hawkish (Dollar, Pound) and dovish (Yen, Euro) currencies amongst the majors the docket intensifies.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.