Tuesday, 27 June 2017

Central Bank Leaders Talk; EURUSD In Focus

Posted by Anonymous at 12:50 Labels:

The EURUSD was up 1.1225 as of 08:15 GMT on Tuesday, climbing 0.39 percent after long hours around the 1.1180-1.1190 area, as traders eyed ECB President Mario Draghi and Fed Chair Janet Yellen speeches later in the session.

In his opening speech of ECB Forum on monetary policy in Sintra, Portugal, Draghi stated the regional regulator would have to be “prudent” when adjusting their monetary parameters.

The comment comes in at key moment for the central bank, when discussions on the reduction of the 2.3 million euro bond-buying program and possible rate moves are being prepared.

"We can be confident that our policy is working and its full effects on inflation will gradually materialize. But for that, our policy needs to be persistent, and we need to be prudent in how we adjust its parameters to improving economic conditions," explained Draghi earlier today.

The fact that Draghi is suddenly talking about “adjustment” is quite surprising as he’s a strong protector of the bank’s stimulus, arguing recent inflation peaks were a mere result of higher oil prices. Plus, he believes QE is still needed to promote job creation and support business.

Meanwhile, the dollar edged down against major currencies as traders awaited comments from Yellen and other members of the Federal Open Market Committee on economic conditions and the future of monetary policy for the world’s first economy.

The US dollar index, which tracks the greenback against a basket of major rivals, was 0.41 percent lower to trade at 96.72.

Last week, Fed officials have been divided on whether the regulator should move forward with rate hikes later this year. Some believe the normalization process can’t be stopped at this stage, while others signaled economic data is not supporting further adjustments.

According to the CME Group’s FedWatch tool, traders are currently pricing a 43.6 percent probability of a 25 basis points rate hike by December, which would be the third of 2017.

Fed Chairwoman Janet Yellen is set to address the British Academy in London as of 17:00 GMT. Philadelphia Fed President Patrick Harker is speaking at the same city at 15:15 GMT.

No comments :

Post a Comment

Subscribe to: Post Comments ( Atom )