Traders look for signs of tapering amidst slew of positive US data
City Index August 21, 2013 2:03 PM
<p>It has been a quiet week with no significant data releases but positioning yesterday was sell the USD. So for tonight we are not expecting […]</p>
It has been a quiet week with no significant data releases but positioning yesterday was sell the USD. So for tonight we are not expecting to see any tapering announcement, but the market will be looking for any hints as to whether the Fed will start tapering the $85 billion bond purchases. In terms of economic data it has been another strong month for the US with strong data from unemployment claims reducing, the unemployment rate dropping 0.1%, strong PMI data and growing retails sales and also a reduced Trade Balance. Putting all this in the report, it will be hard for them to be too dovish about the economy but you can be assured that they won’t give too much away. I would expect a bit of a mixed view on tonight’s meeting in the FX markets and more traders getting ready for next month.
Moodys has revised its US outlook to stable after more than five years. This has given USD a boost overnight and reports from the Red Book indicate that US retail sales are up 0.2% in the first two weeks of August.
JPY meanwhile had a sharp fall on reports that Kuroda is calling on Japan to proceed with the sales tax hike and he believes that this will not affect his goal to beat Japan’s 15-year deflation.
The euro has fallen from its six-month high yesterday, with the USD gaining on FOMC tonight and Moodys’ upgrade to stable. But also weighing on the euro is talk of Greece still needing a third aid programme as Germany’s Schaeuble says, and reports that this will be financed via the EU budget.
Supports 1.3400 1.3350 1.3300 | Resistance 1.3450 1.3485 1.3500
Supports 97.10 96.85 96.45 | Resistance 97.75 98.25 98.60
Supports 1.5650 1.5625 1.5560 | Resistance 1.5700 1.5725 1.5750
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.