German IFO business climate dropped to 108.3
Published: Monday 25 July 2016
The currency markets are generally steady today as markets wait for the heavy weight events later in the week. We’ve been stuck in a tight range despite the Euro seeing slightly better than expected confidence data. German IFO business climate dropped to 108.3 in July, from 108.7 in June, but beat expectation of 107.5. IFO president Clemens Fuest said "the bottom line is the German economy proves resilient."
The main event is the two-day FOMC meeting across tomorrow and Wednesday. It is widely anticipated that no change in the monetary policy would be announced. Indeed, the market has only priced in a 3.6% chance an interest rate rise at this meeting. Policymakers should keep the door open for a move in September but are likely to refrain from sending a signal of it. They are mostly likely to wait until the Jackson Hole meetings in August for more indicators for a September hike. Either way though the decision and statement will be released overnight so it is a good idea to use market orders.
New Zealand trade balance comes out tonight and is expected to show a slim surplus of 127m in June down from May’s 358m, expectations are low so the risk appears to be skewed to the upside for the Kiwi so any short term NZD buyers may want to trade now.
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