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XE Market Analysis: Sterling Stable as PM May Allows Final Vote on Brexit Withdrawal Agreement

By: xemarketanalysis

OVERVIEW GBP is buoyed by average earnings creeping higher. US Dollar trades on the back foot as the inflation rate excluding food and energy came in at 1.7%, against expectations of 1.8%. The Euro remains stable as Merkel tries to put together her government. The Swedish Krone gains helped by a boost in inflation. HIGHLIGHT British PM May has announced that a final Brexit withdrawal agreement will be placed by both the House of Parliament and House of Lords. US DOLLAR The US Dollar remains quiet as we await the FOMC meeting results where it is widely expected for them to raise interest rates by 25bps. Read more

XE Market Analysis: Asia - Dec 13, 2017

By: XE Market Analysis

The dollar dropped early on, as core CPI was cooler than expected. The unit stayed down into the FOMC announcement, and fell after the as-expected 25 basis point Fed rate hike, then quickly headed above levels just prior to the announcement, before dipping again. Read more

US Bond Market Week in Review: The Fed Is Chasing An Inflation Ghost

By: HaleStewart

The Fed voted to raise rates an additional 25 basis points. After noting the economy was growing solidly, the observed: Consequently, the Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong. Read more

Fed rate hikes and the Phantom Menace of inflation

By: New_Deal_democrat

With this morning's CPI report, inflation has run at a whopping 2.2% YoY. Core inflation is still under 2%. In other words, if the Fed is fighting inflation, it is a Phantom Menace. While in most cases, as shown in the first graph below showing the last 70 years, the Fed has raised rates generally coincidentally with an increase in inflation, three times before, the Fed has raised rates in the face of an inflation phantasmagoria: Note that the late 1950s and 1960s, and again in 1994 there was a Fed rate hike campaign in the face of no or virtually no increase in inflation. Let's take a closer look at what happened each time. Read more

XE Market Analysis: North America - Dec 13, 2017

By: XE Market Analysis

The dollar recovered its poise during the London AM session after taking a hit during the Asian session on news that a Democratic candidate won a Senate seat in the state of Alabama for the first time since 1992, which was taken as a possible threat to the implementation of the Trump agenda. Read more

XE Market Analysis: Europe - Dec 13, 2017

By: XE Market Analysis

USD-JPY took a 30-pip clobber on news that Democrat Doug Jones won the election for an Alabama senate seat, the first time there's been a Democratic Senate member from that state since 1992. The market narrative is that this will erode the chances for corporate-friendly legislation in the U.S., with the Republican advantage in the Senate ebbing to 51 to 49 from 52 to 48 (aside from the fact that the election result bods badly for the GOP in the mid-term elections in November 2018)) . Read more

XE Market Analysis: Asia - Dec 12, 2017

By: XE Market Analysis

The dollar rallied in N.Y. trade on Tuesday, as warmer U.S. PPI, and softer European data supported. In addition, the greenback was bid up into Wednesday's FOMC meeting, where a 25 basis point rate hike is widely expected. Given a hike has been priced in, risk for the dollar appears to be a sell-the-fact sell-off. Read more

XE Market Analysis: Dollar on the Rise as the Fed Meeting Begins

By: xemarketanalysis

OVERVIEW GBP rises after CPI hits a 6-year high. German ZEW survey hits fresh multi-year high US producer prices rise at a faster pace in November. US stock markets hit fresh record highs. HIGHLIGHT The US Dollar is broadly higher as the Federal Reserve commence their two-day meeting to decide whether to raise interest rates for a third time this year. Read more

XE Market Analysis: North America - Dec 12, 2017

By: XE Market Analysis

The dollar has traded softer for the most part, mostly against the commodity currencies, losing over 0.5% in the cases against the Australian and New Zealand dollars, and 0.3% to the Canadian dollar. The dynamic has been concomitant with a 0.7% gain in oil prices, with the gains on the week of crude now tallying over 2%. Read more

XE Market Analysis: Europe - Dec 12, 2017

By: XE Market Analysis

USD-JPY eked out a new four-week high of 113.69, and the New Zealand dollar rallied strongly following an announcement that a new RBNZ governor had been appointed, which was greeted as a something of a relief by Kiwi markets (the currency having been under pressure amid a cloud of policy uncertainty following elections in September). Read more

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