It was a choppy start to the week in terms of movement in the currency markets. Markets are likely to have wild moves today, considering the high impact economic data on the calendar as we look at the daily Forex news and trade opportunities.
14 February, AtoZForex – On today’s daily Forex news and trade opportunities, the highlight is Fed chair Yellen’s testimony on the Semiannual Monetary Policy Report before the Senate Banking Committee.
#1 Australia business confidence soars
The Australian economy is having good times. Iron ore prices have recently surged and business conditions and confidence unexpectedly jumped. This optimism is reflected in the Aussie, with the currency on a steady rise. The latest NAB’s monthly conditions index showed a six point climb in January, from an already strong 10 points to 16. This puts it well above the long-term average and indicating very strong levels of business activity.
Opportunity: Buy AUDUSD on dips
#2 Here is what markets should be listening for as Congress grills Yellen
Stanley Fischer, the US Fed Reserve Vice Chairman, said there was significant uncertainty about US fiscal policy under the Republican administration. But the Fed knows their responsibility and is going strictly in meeting targets of maintaining full employment and getting inflation to 2%. However, a key point traders will be listening for are clues as to whether she thinks the Fed will not be the only central bank to move away from extraordinarily easy policies. This could have a larger and more lasting impact on world financial markets. Hence, making listening for Yellen’s views and confidence level about the U.S. and global economies even more important
Opportunity: Sell USDCAD on rallies
#3 Uncertainty in 2017 Fed rate hikes: Evans vs. Bullard
In a recent outpour of opinions, Fed President of the Federal Reserve Bank of Chicago, Mr. Evans, stated that there will be three interest rate hikes this year whereas Bullard expects only one hike. He expects the Federal Reserve to raise the interest rates three times this year looking at the positively driven US fiscal policies. On the other hand, James Bullard, President of St. Louis Federal Reserve Bank, on the same day stated that despite the Republican and new Congress economic policies, interest rates can likely remain low. According to the Wall Street Journal reporters, he expects the Fed to hike the interest rate only once this year looking at the past pace.
#4 Wolfgang Schaeuble predicts Grexit
Wolfgang Schaeuble has been a long time critic of Greece debt situation. The German finance minister has again criticized Athens. He said He said that calls to cut the country’s debt would eventually lead to Grexit. Such honest evaluation of Greece’s situation by Mr. Schaeuble follows the recent report by the International Monetary Fund (IMF) that claimed Greece’s weak economy would soon become ‘explosive’.
#5 Why rolling back Dodd-Frank might be complicated for Trump
Donald Trump has inked the Executive order to revise the Dodd-Frank act on the 3rd February, just after taking over the White House. The order calls for US Treasury to assess the financial regulations and spot the ones that are onerous. Some of the media reports were calling Trump’s initiative the “rolling back” of Dodd-Frank. However, some of the market experts believe that such name is too simplified. Where the reality is that Donald Trump intends to roll back parts of the Act, he also cannot do it by himself. There are multiple reasons for this. One of the key ones is the nature of the agency most central to the writing of the Dodd-Frank.
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