US Dollar Hammered By Fed Speak
$.DXY
Risk off sentiment currently dominates all asset classes.
The overnight mixed China trade report has done little to support more substantial equity gains.
The mighty US Dollar and Japanese Yen are again the favored safe haven currencies, mostly at the expense of high-beta commodity Fx US Dollar pairs (AUD, CAD & NZD).
In EM pairs, the market is focusing on SGD ($1.40) ahead of Wednesday’s MAS decision. The Singaporean authorities are poised to ease monetary policy for the 2nd time this year in an effort to revive slowing growth.
Cable remains under pressure: More proof that global expansionary policies are not capable of stoking inflation.
Less than a year ago the Bank of England (BOE) were expected to be the 1st of the major CB’s to tighten monetary policy.
After Tuesday’s UK inflation numbers that seems a distant possibility. Annual inflation has again turned negative for the 2nd time this year, and supports FI dealers that UK rates will be pegged at lower for longer for the foreseeable future.
The BOE’s 1st-rate hike is being priced in for the end of 1-H of Y, 2016. Sterling (£1.5205) has dropped just under 2 big marks after data this morning showed that UK inflation fell -0.1% M-M in September.
Stay tuned…
HeffX-LTN
Paul Ebeling
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