Once again another fresh week has started on a quiet note. Summer trading conditions appear to be arriving thick and fast. While the pound traded in a 0.4 cent range against the US dollar it remained in what’s been essentially a 20pip zone against the single currency for almost a week now!
No major data-points were released yesterday, the market was simply trading off last week’s solid US jobs report. This has given the greenback a new layer of support. Expectations of near-term rate cuts are diminishing, which is making it hard for any of the majors to fight against what’s an increasingly resilient US dollar.
The next major test for the mighty buck arrives tomorrow. Sadly, today is another quiet day for economic numbers, however, we will be treated to a number of Federal Reserve member speeches. Both tomorrow and Thursday see Fed chair, Powell, testify to the legislature (House of Representatives and Senate). These 2 performances will be incredibly important. It is here where Powell will lay out evidence which either does or doesn’t support a rate cut later this month. Should the central banker hype up the possibility of a cut, whether it’s only for insurance purposes (i.e. to fend off any future threats to the economy) or not, then we should see a weaker dollar. On the flip-side, if Powell resists market pressure to cave into lowering rates then it’s all aboard the dollar train as it’s likely to steam forward against its counterparts!
Written by Viv Savani. 8:35am, July 9th 2019
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8:26am, July 5th 2019
Super-subdued session, final trading day of the week should see things heat up…