Daily Alert: Thursday 13th July 2017

Mark NugentDaily Alert, July 2017

Forex Analysis for Thursday 13th July 2017

Economic Calendar

GBP Average Earnings Index hit target at 1.8%.

Bank of Canada raised interest rates as expected to 0.75%.

BoC GDP & CPI forecasts:

GDP forecasts:

2017 2.80% vs. prev. 2.60%
2018 2.00% vs. prev. 1.90%
2019 1.60% vs. prev. 1.80%

CPI forecasts:

2017 1.60% vs. prev. 1.90%
2018 1.80% vs. prev. 2.00%
2019 2.10% vs. prev. 2.10%

Fed chair Yellen repeats view for gradual hikes in her prepared testimony to the House Financial Services committee

– Balance sheet reduction to begin this year, long-term size still to be determined

– Rates will not need to rise much further to get to the neutral rate

– Economy picked up in Q2

– Carefully monitoring prices, Yellen attributes recent dip to a ‘few unusual’ price declines for certain items

Market Reaction

The USD was down on Yellen’s dovish comments and the prospect of fewer rate hikes. US equities gained on the news with the Dow30 closing at a new all-time high. Elsewhere, equities were more mixed, with the FTSE100 up, FTSE250 down, Euro50 up and the Japan 225 unmoved. Oil spiked up to the 50MA but closed down on the day. The EUR gave back all of Tuesday’s gain and some – finishing below the resistance line. The JPY strengthened. The CAD rose on the interest rise and the AUD and NZD were bolstered by good Chinese Trade Balance numbers this morning (294B vs 273B, with both imports and exports up).

News Media

USD tumbles after Yellen comments

Today’s Calendar

Fed Chair Yellen’s testimony continues.

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