Dollar shorts continue to be squeezed as the dollar index looks to be going to record its second weekly decline in a row. Failure at resistance just above the 100.00 level for the second time this year has formed a big double top fuelling calls for further weakness as investors bake in the highly expected rate hike form the Federal Reserve next week. It’s the majors that are making the most ground against the greenback with stronger than expected Australian unemployment data giving AUDUSD a boost, meanwhile EURUSD recaptured the 1.1000 level yesterday trading just below there at 1.0990 at the time of writing and GBPUSD is just below 1.5200. Even the cut in interest rates from the RBNZ overnight from 2.75% to 2.50% hasn’t dented strength in NZDUSD.
All eyes on the Bank of England today, but ahead of then the SNB makes its policy decision where it’s expected to keep the base rate at -0.75%. For the BOE the focus will be not just on the minutes and how the MPC votes, but on the outlook for inflation which continues to bump along just above 0%. There are many diverse views on when the BOE will hike rates for the first time and if indeed it will be in 2016, but the move in sterling yesterday just reminded investors that if the Fed moves next week, the BOE may not be all that far behind in commencing its tightening cycle.
"Disclaimer: This material is considered as a marketing communication and does not contain and should not be construed as containing investment advice or an investment recommendation, or, an offer of or solicitation for any transactions in financial instruments.
Past performance does not guarantee or predict future performance. FxPro does not take into account your personal investment objectives or financial situation and makes no representation, and assumes no liability to the accuracy or completeness of the information provided, nor for any loss arising from any investment based on a recommendation, forecast or other information supplied from any employee of FxPro, third party, or otherwise.
This material has not been prepared in accordance with legal requirements promoting the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. This communication must not be reproduced or further distributed without prior permission of FxPro."