Labour Day holiday set to reduce flows – volatility still expected…
Much of the globe will be observing the Labour Day holiday today. Flows across financial markets, especially foreign exchange, will be reduced. However, with a number of important releases scheduled from both the UK and US today, volatility should remain. This very much applies to the GBPUSD pair, which should encounter the strongest flows given the economic data in question.
Yesterday saw a generally weaker US dollar. There was also strong levels of demand for the pound which could not be pinpointed to any one particular reason. There were no UK data releases nor were there any significant developments on the Brexit front. The most likely reason for the move was simply month end flows ahead of today’s holiday. The pound will remain in focus today as the 1st report of 3 monthly PMIs is set for release at 0930. Today will see a snapshot of the manufacturing sector.
The main event of today’s trading session will arrive this evening with the latest dose of monetary policy analysis from the Federal Reserve. Once again, the central bank will provide updated economic forecasts whilst releasing a statement and holding a press conference. The greenback will be in the spotlight again and mostly with solid tailwinds behind it. The US economy is still healthy with almost all its sectors proving resilient in the face of a business cycle which is now approaching its 12th year. Before the Fed announcement tonight at 7pm there’ll be a few US reports of note. ADP private payrolls will be crossing the wires at 1315 while manufacturing numbers will arrive at 3pm.
Written by Viv Savani. 9:50am, May 1st 2019
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