Clearly you can speculate that 4.75 percent is not the end of Federal Reserve tightening and there is a good argument now that they go to five percent. People don't want to be dollar short at the moment. |
In general terms were are still in a $1.20/1.21 range for euro/dollar ... but the focus is moving away from concerns that the U.S. economy is slowing. |
In the euro zone numbers have been better than expected. In respect to second half of the year the market is too cautious on the ECB and future rate hikes. |
In the euro zone numbers have been better than expected. In respect to the second half of the year the market is too cautious on the ECB and future rate hikes. |
It's still the aftermath of the jobs data, which came as a bit of a shock. For the dollar, now the focus is on wage inflation and inflation in general. |
On the U.S. data front we did not get very reassuring numbers. To confirm market expectations in respect of Federal Reserve tightening this year, we need significantly stronger numbers. |
People are not yet factoring in a high probability of a military strike and that's rather surprising. We should be preparing for oil prices to spike quite a lot higher, even $100 a barrel is not out of the question, and that could have a big impact on currencies. |
People would start to worry about growth, and given the fact that the market is already looking for the Fed to end its rate increases this could be a dollar negative. No one would expect central banks to be raising rates in an environment where energy costs are going up sharply. |
The growing tension with Iran is likely to be dollar negative news. |
The risk that rates will go beyond 4.50 percent is probably higher than currently priced into the market. |
The theme in the market remains interest rate differentials, it's not surprising to see the dollar come under some pressure. |
The U.S. economy is still doing very well, and numbers out this week should be fairly solid. The dollar is going to be well supported. |
They may keep a zero interest rate policy for quite a while. They don't seem in a rush to make the first move. |