This Wednesday should bring news of the US Federal Reserve’s normalisation strategy.
The Fed’s January meeting dropped its tightening bias. Yet with interest rates on hold for now, investors will watch balance sheet management. Chairman Jerome Powell suggested the bank was near to settling a strategy for balance sheet roll-off. January meeting minutes could time the release of an updated Policy Nominalization Principle and Plans (PNPP): this would confirm the Fed is in a sustained holding pattern.
Headwinds around GBP and EUR in Brexit fears and soft economic data mean that gains against the greenback are unlikely at this point. Play the range 1.1200-1.1500 in EUR/USD.
Today’s US holiday will keep trading subdued. The news flow remains dominated by old stories that refuse to move out of the way: trade tensions, Brexit and US political chaos. Perhaps this is why we are seeing buyers stepping back into Bitcoin. Or perhaps it is the surprise issuance of the JPM Coin. Additional Fed dovishness should also support cryptos.
Disclaimer: While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein. This document does not constitute a recommendation o sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investment.
Although every investment involves some degree of risk, the risk of loss trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make informed decisions prior to investing. The material presented here in not to be construed as trading advice or strategy. Swissquote Bank makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments."