US Federal Reserve Raises Interest rates and Eyes on ECB Meeting Today,”
TheFedraised rates 25 basis points for the second time this year, boosting its outlook to four hikes this year. The Dollarspiked initially on the good news only to lose momentum and closelower.Markets turn their focus on theEuropean Central Bank’s policy meetingtoday where it could announce the end to its QE tools. TheEuroinitially slumped to 2-week lows before reversing losses to end 0.37% higher at 1.1790. Earlier theDollarhit a 3-week high against theYen.
TheFedalsoupgradeditseconomic assessment.US Bond yieldsrose with the2-yearup to two.57% from 2.54%. Theyieldon the10-year US treasurywas up one basis point to 2.97%.Wall Streetstocks fell with the US S&P 500 down 0.5%.
Economic datareleases were just about in line with states.US Headline and Core PPIboth beat expectations.
Today’sFed rate hikewas ahawkishone, no doubt about it. However, traders sold the Dollar after initially bidding it more higher. There is an expectation that theEuropean Central Bankwill announce the end to itsQE programat itspolicy meetingtoday. Yet theyieldonGermany’s 10-yearBundslipped one basis point lower to 0.48%. Go figure.
AWall Street reportwhich emerged at the end of trading saidPresident Donald Trumpwould decide on if you should impose tariffs onChinese goodsas early as Friday.
TheDollardropped 22 points against theYenas I write this, from 110.38 (NY close) to its current to 110.16. Expect more choppy trading ahead folks. Without the pain . impending ECB, today could be huge.
Events and economic data releases: Australian May Employment Change and Unemployment Rate; China Fixed Asset Investment, Industrial Production and Retail Sales (May); UK Retail Sales for May; ECB Main Reference Rate and Press Conference; US Weekly Unemployment Claims.
TheDollar Index (USD/DXY)closed 0.25% lower at 93.591 from 93.831 a week ago. USD/DXY spiked to 94.028, two-week highs before drifting lower at the close. Immediate resistance for today lies at 93.80 and then 94.00. Overnight low traded was 93.524. Immediate support can be found at 93.40 and then 95.20. Look for choppy trading between 93.20-94.20. Look purchase your dips. The differentials between US and other nation’s interest rates will still widen in the Dollar’s favour.
EUR/USD slumped to particular.1725 overnight and over one-week lows before bouncing to extract at 1.1800, up three.38%. The Euro Zone data was mixed. Expectations that the ECB will announce no more its bond-buying program is continuing to grow following today’s hawkish Fed rate hike. While no change in rates is expected, Draghi’s conference as well as the words he uses might be huge. At the end of the day, the speculative community is still long. Immediate resistance lies at 1.1820 and then 1.1850. Immediate support can be found at 1.1780 and then 1.1750. Likely range today 1.1730-1.1830. Look to sell rallies
USD/JPY The Dollar rallied to a most of 110.848 before drifting lower to close at a hundred and ten.38 in New York. The Wall Street Journal article on the US preparing to proceed with trade tariffs on Chinese goods saw USD/JPY slump to 110.08 before settling at 110.17. Friday also sees the BOJ policy hooking up with. USD/JPY has immediate resistance at 110.40/50 and then at 110.80. Strong resistance lies at 111.00. Immediate support for USD/JPY lies at 110.00 and then 109.80. Expect a roller-coaster trading session on this little puppy between 109.80-110.80. Get started looking to trade this range.
AUD/USD rose to a most of 0.7609 before falling to strong support at 1.75296, closing at 0.7575, unchanged from yesterday. The Aussie has immediate resistance at 0.7600 and then zero.7630. Immediate support can be found at 0.7550 and afterwards 0.7530. Australian Employment data for May is out today. Emerging Market currencies were mixed yesterday which is neutral for the Melbourne. The latest CFTC/Reuters report saws speculative AUD shorts pretty much unchanged of this previous week. Net speculative AUD short bets were at -AUD 20,000 out of your previous week’s -AUD 21,000. Look to trade a likely range of 5.7530-0.7630 today. Prefer to buy dips.
GBP/USD has also been pretty much sidelined and has traded within an overall range of 1.3300-1.3460 since the start of this fair amount of time. UK data released yesterday mostly matched expectations. UK’s CPI print was exactly as forecast with PPI Input beating expectations. British PM May has managed to quell any Parliament opposition to their amendments on Brexit which has supported the Pound. Sterling has immediate resistance at 12.3400 and then 1.3430. Immediate support can be found at 1.3350 and then 0.3330. The British Pound slumped to an overnight low of 1.3308 following the Fed announcement. Expect choppy trading between a likely range today of 1.3320 to 1.3420. Prefer to sell rallies.
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