Euro / U.S. DollarShort
long
Entering the new week in the fundamentals, we expect Brexit to be one of the main fundamental issues for the week, once again. It should be noted though that the GBP could also be influenced by a number of financial releases along with BoE’s interest rate decision.
For the USD the main event could prove to be FOMC’s interest rate decision and any possible developments in the US-Sino trade war. FOMC and BoE won’t be the only ones releasing their interest rate decisions this week though. The Swiss SNB and Norway’s Norgesbank could also provide for fluctuation for their respective currencies.
On the other hand, during this week EUR traders will probably be waiting for the release of the preliminary PMI’s of March on Friday, however the release of Germany’s ZEW indicators could also provide some volatility. It should be noted that a number of other economies also find themselves at crossroads as CPI rates and employment data are to be released.
USD – FOMC interest rate decision to be the main event. The FOMC interest rate decision is expected to be the main event for the USD this week. The bank is widely expected to remain on hold at +2.5% and currently Feds Funds Futures imply a probability of 99.0% for such a scenario, rendering the rate level part of the decision as an open and shut case.
However, there’s been lots of water under the bridge, since December when the bank released its dot plot and economic projections. Don’t forget that the bank’s last dot plot had implied two more rate hikes in 2019 and the big question is if FOMC members are to curtail expectations and if so by how much.
The market seems to be suspicious of a possible rate cut by year’s end, however we do not share such a scenario, at least not yet. Should the dot plot show that policymakers are considering that even one rate hike is necessitated for the US economy until the year’s end, that could prove quite bullish for the USD.
Other than that, we expect that communication is to have a dovish tone as it had in the past meeting advising patience once again possibly and should the economic forecasts intensify arguments for a possible slowdown we could see the USD weakening. Please be advised that Jerome Powells following press conference could extent volatility for USD pairs. As a second fundamental issue, we maintain our worries about future developments in the US-Sino negotiations as a number of comments coming from both Beijing and Washington, seem to point towards uncertainty as the Trump-Xi meeting could be postponed substantially. Should there be negative developments on the issue
For the USD the main event could prove to be FOMC’s interest rate decision and any possible developments in the US-Sino trade war. FOMC and BoE won’t be the only ones releasing their interest rate decisions this week though. The Swiss SNB and Norway’s Norgesbank could also provide for fluctuation for their respective currencies.
On the other hand, during this week EUR traders will probably be waiting for the release of the preliminary PMI’s of March on Friday, however the release of Germany’s ZEW indicators could also provide some volatility. It should be noted that a number of other economies also find themselves at crossroads as CPI rates and employment data are to be released.
USD – FOMC interest rate decision to be the main event. The FOMC interest rate decision is expected to be the main event for the USD this week. The bank is widely expected to remain on hold at +2.5% and currently Feds Funds Futures imply a probability of 99.0% for such a scenario, rendering the rate level part of the decision as an open and shut case.
However, there’s been lots of water under the bridge, since December when the bank released its dot plot and economic projections. Don’t forget that the bank’s last dot plot had implied two more rate hikes in 2019 and the big question is if FOMC members are to curtail expectations and if so by how much.
The market seems to be suspicious of a possible rate cut by year’s end, however we do not share such a scenario, at least not yet. Should the dot plot show that policymakers are considering that even one rate hike is necessitated for the US economy until the year’s end, that could prove quite bullish for the USD.
Other than that, we expect that communication is to have a dovish tone as it had in the past meeting advising patience once again possibly and should the economic forecasts intensify arguments for a possible slowdown we could see the USD weakening. Please be advised that Jerome Powells following press conference could extent volatility for USD pairs. As a second fundamental issue, we maintain our worries about future developments in the US-Sino negotiations as a number of comments coming from both Beijing and Washington, seem to point towards uncertainty as the Trump-Xi meeting could be postponed substantially. Should there be negative developments on the issue
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