Slow start to the week yesterday, due to US bank holiday. Markets have, however, picked up the pace today. Strong moves expected ahead as we look at potential drivers on the daily Forex news and trade opportunities.
February 21, AtoZForex – We have the UK Inflation Report Hearing, New Zealand GDT price index and more in today’s daily Forex news and trade opportunities.
#1 Loretta Mester sends USD up?
Cleveland Fed President, Loretta Mester said on Monday that if the economy grows at the current pace, she would be comfortable with rate hike at this point. At past meetings, Mester has dissented against decisions to keep rates steady, instead preferring a faster pace of rate hikes. Moreover, she urged the Fed to focus on returning to a more normal policy footing. She also wanted Fed to cut down its $4.5-trillion bond portfolio. It is believed that the USD rose in Asia/Pacific trade on Monday following her remarks. The US Dollar Index ticked up from 100.86 up to 100.96 after Mester spoke.
#2 UK business rates 2017 hit small businesses ahead of Brexit
Reportedly, a source from government stated that the Chancellor needs to “lessen the pressure” on small firms in the UK. The source highlighted that the small businesses are facing big increases ahead of Brexit due to the increases in business rates. Where senior Conservatives stated that the UK Treasury acknowledges concerns about the small firms, the Treasury is also ready to act in order to prevent “cliff edge increase”.
#3 ECB ready to amend its QE rules to maintain stimulus
The European Central Bank (ECB) authorities signaled that they will ease the application of some rules on bond purchasing to support their “substantial” expansionary policy. This would provide the opportunity for more purchases of peripheral debt. Spanish and Italian bonds have gained after the ECB stated that “limited and temporary deviations” from the capital key “were possible and inevitable.”
#4 Eurozone data due
The first set of potential market movers come from the manufacturing and services PMI due from France and Germany. Also, we have the ECOFIN Meetings due today. The Euro is likely to have a volatile day as the growing concern about Greece’s debt position will be a major issue of discussion.
Opportunity: Sell EURUSD on negative data
#5 UK Inflation Report Hearings
Another market mover. It will be important to listen to what the BOE Governor and several MPC members have to say regarding inflation and the economic outlook before Parliament’s Treasury Committee. The sterling has been ranging for a while now, and this event could bring a potential breakout for the currency.
Think we missed something? Let us know down in the comments section.