Talking Points:
Markets Look to “Fed-Speak” Hoping for a Respite from Risk Aversion
Aussie Dollar Rallies as RBA Talks Down Interest Rate Cut Speculation
British Pound Modestly Higher as UK Construction PMI Tops Forecasts
A relatively quiet US economic calendar puts “Fed-speak” in the spotlight. Jeffrey Lackerand Charles Evans, Presidents of the Richmond and Chicago branches of the Federal Reserve, are scheduled to speak. US economic news-flow has significantly deteriorated relative to baseline expectations over the past three weeks.
Needless to say, slowing performance in the world’s largest economy raises fears about global economic growth at large. With that in mind, hints at the possibility of a pause in the Fed’s “tapering” of QE asset purchases may boost risk appetite. That bodes ill for the US Dollar but may offer a lift to sentiment-geared currencies including the Australian, Canadian and New Zealand Dollars.
The Aussie outperformed in overnight trade after the Reserve Bank of Australia said “monetary policy is appropriately configured,” arguing that “the most prudent course is likely to be a period of stability in interest rates.” That squashed speculation about a possible resumption of the bank’s easing cycle, sending the currency broadly higher against its leading counterparts. The British Pound edged upward following a better-than-expected UK Construction PMI print.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
23:50
JPY
Monetary Base (End of Period) (JAN)
¥200.9T
–
¥201.8T
23:50
JPY
Monetary Base (YoY) (JAN)
51.9%
–
46.6%
0:00
NZD
ANZ Commodity Price (JAN)
1.2%
–
1.0%
3:30
AUD
RBA Interest Rate Decision
2.50%
2.50%
2.50%
European Session
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
9:30
GBP
PMI Construction (JAN)
64.6 (A)
62.1
Medium
10:00
EUR
Euro-Zone PPI (YoY) (DEC)
-0.8% (A)
-1.2%
Low
10:00
EUR
Euro-Zone PPI (MoM) (DEC)
0.2% (A)
-0.1%
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.3395
1.3454
1.3489
1.3513
1.3548
1.3572
1.3631
GBP/USD
1.6035
1.6191
1.6248
1.6347
1.6404
1.6503
1.6659
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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Source: Daily fx
