In this daily forex review, the British pound is set to take center stage once more with the BOE monetary policy meeting minutes release. Yesterday’s CPI figures fell short of consensus but weren’t enough to derail the pound’s rallies. The headline figure slipped from 1.8% to 1.5%, indicating that the BOE probably shouldn’t tighten monetary policy just yet. However, more concerns raised on house price inflation in today’s minutes release might continue to drive rate hike expectations.
The Greenback traded mostly higher than its major forex review counterparts, despite mixed data from the US economy. Building permits and housing starts posted weaker than expected results while CPI figures were better than expected. Headline CPI saw a 0.4% uptick while core CPI showed a 0.3% gain. For today, the FOMC interest rate decision will be the biggest mover for the US dollar. Yellen is expected to maintain the taper pace and announce the projections for growth and inflation. Hawkish remarks could lend support to the dollar while dovish comments could lead to a selloff.
The euro seemed immune to terrible economic data in the latest forex review, as it barely sold off even with the bleak German ZEW reading. The figure slipped from 33.1 to 29.8 instead of improving to 35.2 while the euro zone ZEW did show an improvement but fell short of the estimated reading. There are no major reports lined up from the euro zone today so euro pairs might be in for a bit of sideways movement.
Economic Events Forex Review
The franc struggled to hold steady in recent forex review trading, with traders starting to place their bets on easing or intervention for the upcoming SNB rate decision. Swiss PPI came in better than expected with a 0.1% uptick instead of the estimated flat reading. Today, the Swiss ZEW is up for release and a stronger than expected report might reduce easing expectations.
The yen continued to weaken against its forex counterparts when the BOJ minutes revealed that policymakers thought the moderate recovery in the Japanese economy is likely to carry on. This sparked gains for the Nikkei and a pickup in risk sentiment. However, the board also cautioned about the downside risks to recovery particularly in emerging economies and commodity markets. There are no reports due from Japan today.
The Australian dollar lost a lot of ground in yesterday’s trading as the RBA minutes turned dovish. RBA Governor Stevens emphasized the need to keep monetary policy accommodative and that the Australian dollar is still high in historical standards. Earlier today, Australia’s CB leading index marked a 0.1% decline, lending more weakness to the Aussie. Canadian wholesale sales and NZ GDP are due later today.
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