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- Market sentiment is swinging back in favour of the expected forthcoming rate hike by the Fed as very likely to be the last in the current tightening cycle, despite more hawkish comments from certain Fed members over recent days. This has triggered a renewed, weak selloff of the greenback in the Forex market, while the Euro is clearly the strongest major currency over the long-term. This puts the EUR/USD currency pair in focus as it rises today to reach a new 15-month high above $1.1250, which will be of great interest to trend traders as this currency pair has a history of trending quite reliably.
- The Reserve Bank of Australia released the minutes of its recent policy meeting a few hours ago, which showed that the Bank saw a strong case for a further rate hike of 0.25% but decided to pass on a hike. The minutes also stated that current monetary policy is “clearly restrictive” and would need to move further in that direction, with further consideration of a new rate hike at August’s policy meeting a certainty. However, the price of the AUD barely reacted to the release.
- There was a release yesterday of US Empire State Manufacturing Index data which came in stronger than expected, suggesting a slightly stronger manufacturing sector.
- Poor Chinese GDP data released yesterday has weighed on the Chinese stock market today, with the Hang Seng Index down by more than 1.5% on the day.
- Yesterday saw US stock markets again rise to reach new 1-year highs in the NASDAQ 100 Index and the S&P 500 Index. The outlook is bullish for risk assets and bearish for the US Dollar as there is now a more dovish expectation on further US rate hikes, and trend traders will be positioned in these directions.
- In the Forex market, there has been little directional movement over today’s Asian session, but the New Zealand Dollar has been the strongest major currency so far today, while the US Dollar has been the weakest.
- There will be a release of US Retail Sales data later today.
- There will be a release of Canadian CPI (inflation) data later today.