MARKET DEVELOPMENT – USD PLUMMETS ON DOVISH FED RHETORIC
USD: The US Greenback is on the backfoot this morning, down zero.7% with bulls caught off-guard by Fed Chair Powell’s somewhat cautious stance. Whereas the Chair highlighted that the US financial system is robust, he did nevertheless, point out that the US may face headwinds going into subsequent 12 months concerning slowing demand and fading fiscal stimulus. Latest dovish commentary from Fed’s Clarida and Kaplan who each sees some proof that the slowing of worldwide financial system is changing into a headwind, has seen US yields drop with the 10yr breaking under three.1%, consequently exacerbating USD losses.
Speculative positioning through CFTC present that US Greenback lengthy positioning is considerably crowded with bullish bets valued at $30bln (Highest since Jan 2016), suggesting that upside could also be considerably restricted. As talked about earlier, USD bearish views greatest expressed through USDJPY shorts.
GBP: After yesterday’s turbulent session which noticed GBP pounded following a sequence of excessive profile resignations. The Pound has regained a firmer footing to climb again above 1.28. PM Might’s management was given a much-needed increase after Setting Secretary Michael Gove acknowledged that he wouldn’t resign. Nonetheless, strain stays on Theresa Might as no-confidence letters pile into the 1922 committee. Whereas it’s publicly recognized that 23 letters have been despatched in, the ERG indicate the quantity is near the 48 letters wanted to name for a no-confidence vote in Theresa Might. Speak has circulated vote could happen on Tuesday (What occurs In a No-Confidence vote)
Information as of 14200GMT
DailyFX Financial Calendar: Friday, November 15, 2018 – North American Releases
DailyFX Webinar Calendar: Friday, November 16, 2018
4 Issues Merchants are Studying
“EURUSD Value: ECB Draghi Hints That Uncertainties Might Crimp Coverage” by Nick Cawley, Market Analyst
“How Does a Management Problem to a UK Prime Minister Work?”by Justin McQueen, Market Analyst
“Brexit Information: Sterling Stays at Threat of UK Authorities Breakup” by Nick Cawley, Market Analyst
“USD Outlook: Indicators Rising for a Potential Prime Amid Crowded Positioning” by Justin McQueen, Market Analyst
— Written by Justin McQueen, Market Analyst
To contact Justin, electronic mail him at Justin.firstname.lastname@example.org
Observe Justin on Twitter @JMcQueenFX