Recent data from the Bank of America showed the disappearance of the Trump trade idea as dollar bulls relent. This week so far, the greenback has been mostly weak and seems to remain so for coming days. This and more on the daily Forex news and trade opportunities.
March 22, AtoZForex – We are expecting the US existing home sales report, the crude oil inventories and New Zealand’s rate decision today, as we look at the daily Forex news.
#1 Trump trade idea dissipates
According to research from the Bank of America, four months after the dawn of the Trump trade idea, traders are now giving up on the idea. This is evident from data gathered by the Bank of America Corp.’s flow data, which blends positioning and sentiment surveys conducted with its hedge fund and real money clients, and publicly available futures data. The conclusion of this research is that bullish dollar trades taken after the Trump win have completely vanished as the greenback has now fallen.
Opportunity – Buy GBPUSD on dips
#2 Article 50 commencement date set for March 29
UK prime minister Theresa May plans to trigger Article 50 on 29 March. British citizens are waiting for this moment, which effectively begins the formal process of their country leaving the European Union. Article 50 of the Treaty on the European Union is a part of European Union law that sets out the process by which member states may move back from the European Union.
#3 Euro dollar parity?
Both the Euro and the dollar are surrounded by interesting circumstances which could very well dictate their path in coming months. For instance, the Euro can be driven higher against the greenback by news about the French elections. According to Citi bank, the Euro could jump as high as $1.10 over the next three months if François Fillon scores a victory in the second round, even if Marine Le Pen takes the initial vote. Hence, the bank has now concluded that it does not expect the rally in the US dollar, saying it no longer expects the greenback to reach parity with the euro over the next year.
#4 RBNZ to keep rates on hold
The Reserve Bank of New Zealand is unlikely to change its current stance on rates. The bank is likely to keep its rate at 1.75%. The Bank is again likely to retain its easing bias, even though the domestic economic data is improving. The RBNZ has indicated that inherent uncertainties within the economy remain, especially in the global outlook. Hence, the policy will need to adjusted accordingly and in due time.
#5 Crude Oil Inventories
Oil has been on a dip lately and looks likely to continue, as an effort from OPEC to boost prices has barely had an impact on markets. Thanks to US shale production increases over the past few weeks. The US crude inventories due today will again shake things up in the market.
Think we missed something? Let us know down in the comments section.