Market Analysis by covering: Euro US Dollar, Australian Dollar US Dollar, US Dollar Index Futures. Read 's Market Analysis on Investing.com
Futures lower; gold extends drop; Bitcoin ticks down - what’s moving marketshave plunged, and we think there is enough stability to let data do the talking in FX this week. The US calendar should culminate in decent, opening the door to some more dollar upside.
Elsewhere, the ECB may not discuss the euro much after all, while the RBA could hike tonightThe dollar is looking healthier. The de-basement trade that seemed primarily behind the USD plunge of the past week has started to unwind since Kevin Warsh became US President Donald Trump’s nominee for Federal Reserve Chair. The size of the correction in overbought precious metals is probably offering some additional support to the dollar, but we have stressed repeatedly how the USD drop appeared too detached from the macro story anyway. With the dollar now having recovered to some degree, we think it will move more in line with data and short-term rates dynamics this week. The US calendar is quite heavy, with ISM surveys has seen minimal changes in rate expectations of late, AUD/USD has faced some short-end action on both sides. Markets have progressed to price in 19bp of tightening by the Reserve Bank of Australia at tonight’s meeting, and we are aligned with consensus in calling for a 25bp hike to 3.85%. This appears to be a close call, and while the upward surprise in December justifies this move, the RBA should refrain from signalling that this is the start of a new hiking cycle. Markets are pricing in at least another hike by year-end, and any indications this could be a one-and-done move would cap the support a hike can give to AUD. Our view is that the implications of RBA tightening on AUD/USD may be more visible beyond the short-term anyway, once the USD’s overpowering volatility has dissipated. In line with our USD view, and given market pricing already leaning on the hawkish side, we think AUD/USD should still trade back lower in the coming weeks before re-entering a sustainable path beyond 0.70.This publication has been prepared by ING solely for information purposes irrespective of a particular user’s means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
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