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This morning was quiet on the currency markets with no major movement. UK services PMI came out slightly worse by 0.1 which resulted in sterling falling off slightly.
We had the US trade balance data released today which tightened to -42.37 billion dollars which was expected to be at -44 billion dollars. Not only this, the ADP employment change the precursor to non-farms on Friday which was expected at 198k but came in much better at 257k. As a result, the Dollar has strengthened mildly across the board. ISM non-manufacturing is also out this afternoon and is expected to be slightly better.
The main focus though will be the FOMC minutes this evening with traders stating that the key things to listen out for will be ‘the path’ of future hikes. Last month, Janet Yellen stated a ‘further tightening would happen gradually and be dependent on economic developments’. From her statements, it’s likely that ongoing inflation and labour market developments will be most closely monitored.
Latest FX news by Will Busby