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US Dollar May Rise on Yellen Speech at Jackson Hole
DailyFX.com -
Talking Points:
US Dollar may rise as Yellen fuels rate hike bets with Jackson Hole speech
Aussie, NZ Dollars probably most vulnerable to hawkish Fed outlook shift
British Pound may not find strong direction cues in 2Q UK GDP revision
The Australian and New Zealand Dollars outperformed in otherwise quiet overnight trade. The moves mirrored a pullback in US bond yields, hinting the rate-sensitive currencies found support amid pre-positioning for a much-anticipated speech from Fed Chair Janet Yellenat the Jackson Hole Symposium. Traders suspect the remarks may prove to be a major inflection point for US monetary policy.
On balance, markets appear to be setting up for a relatively hawkish outcome, a view that seems to find inspiration in last week’s round of Fed-speak. The priced-in probability of a rate hike before year-end implied in Fed Funds futures has conspicuously grown to 57.4 percent from 47.3 percent just a week ago. Comments reinforcing this up-shift are likely to boost the US Dollar, with higher-yielding commodity bloc currencies likely vulnerable to outsized selling pressure.
A revised set of second-quarter UK GDP figures headlines the economic calendar in European hours. Expectations point to confirmation of preliminary data showing the economy added 0.6 percent in the three months through June. The report seems too backward-looking to drive strong British Pound momentum considering it mostly covers a period preceding the “Brexit” referendum. Indeed, the BOE has already topped up stimulus in response to the post-vote landscape and now seems to be in wait-and-see mode, so the practical forward-looking implications of today’s release appear to be limited at best.
What do retail FX traders’ buy and sell decisions hint about current price trends? Find out here!
Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
23:30 | JPY | Natl CPI (YoY) (JUL) | -0.4% | -0.4% | -0.4% |
23:30 | JPY | Natl CPI Ex Fresh Food (YoY) (JUL) | -0.5% | -0.4% | -0.4% |
23:30 | JPY | Natl CPI Ex Food, Energy (YoY) (JUL) | 0.3% | 0.4% | 0.5% |
23:30 | JPY | Tokyo CPI (YoY) (AUG) | -0.5% | -0.4% | -0.4% |
23:30 | JPY | Tokyo CPI Ex-Fresh Food (YoY) (AUG) | -0.4% | -0.4% | -0.4% |
23:30 | JPY | Tokyo CPI Ex Food, Energy (YoY) (AUG) | 0.1% | 0.3% | 0.2% |
05:00 | JPY | Natl CPI Ex Food, Energy, 2014 Tax Hike (YoY) (JUL) | - | 0.7% | 0.7% |
European Session
GMT | CCY | EVENT | EXP | PREV | IMPACT |
06:00 | EUR | German GfK Consumer Confidence (SEP) | 10 | 10 | Low |
06:45 | EUR | French GDP (YoY) (2Q P) | 1.4% | 1.4% | Medium |
06:45 | EUR | French GDP (QoQ) (2Q P) | 0.0% | 0.0% | Medium |
08:00 | EUR | Eurozone M3 Money Supply (YoY) (JUL) | 5.0% | 5.0% | Low |
08:30 | GBP | GDP (QoQ) (2Q P) | 0.6% | 0.6% | Medium |
08:30 | GBP | GDP (YoY) (2Q P) | 2.2% | 2.2% | Medium |
08:30 | GBP | Private Consumption (QoQ) (2Q P) | 0.8% | 0.7% | Low |
08:30 | GBP | Government Spending (QoQ) (2Q P) | 0.3% | 0.5% | Low |
08:30 | GBP | Gross Fixed Capital Formation (QoQ) (2Q P) | 0.4% | -0.1% | Low |
08:30 | GBP | Exports (QoQ) (2Q P) | 0.7% | -0.4% | Low |
08:30 | GBP | Imports (QoQ) (2Q P) | 0.8% | 0.1% | Low |
08:30 | GBP | Index of Services (MoM) (JUN) | 0.1% | -0.1% | Low |
08:30 | GBP | Index of Services (3M/3M) (JUN) | 0.4% | 0.3% | Low |
08:30 | GBP | Total Business Investment (QoQ) (2Q P) | -0.9% | -0.6% | Low |
08:30 | GBP | Total Business Investment (YoY) (2Q P) | - | -0.8% | Low |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
EUR/USD | 1.1203 | 1.1242 | 1.1263 | 1.1281 | 1.1302 | 1.1320 | 1.1359 |
GBP/USD | 1.3018 | 1.3113 | 1.3153 | 1.3208 | 1.3248 | 1.3303 | 1.3398 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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