Good morning and happy Monday,
USD – Tax and rate hikes
The EUR/USD cross is slightly higher, nestled around the 1.18 level. Today’s European session saw no tier one data from the Eurozone, and there is little of note as we look ahead to today’s US session. However, later through the week will see multiple central bank announcements, including the Fed which is expected to raise rates for the third time this year. Friday’s particularly strong nonfarm payrolls number of 228,000 is further support for the Fed to hike rates.
A recent survey of economists by Bloomberg shows renewed faith in the US economy for 2018, due to higher inflation expectations, another interest rate rise in March, and the Republican tax plan progress. President Trump will give a speech on Wednesday where he’ll discuss the differences between the House and Senate versions of the tax plans.
Brexit ongoing as GBP most volatile
Last week saw some further Brexit debacles – in what’s becoming a pretty common theme in these morning updates! The UK’s Secretary of State for Exiting the European Union, David Davis, seems to have a knack for sharply affecting the price of the Pound down to a tee.
Against the Pound, the USD has jumped around a lot within a 2 cent range over the past 7 trading days – from 1.3350 to 1.3510. The week ahead is likely a massive one for GBP with inflation news and the Bank of England’s Monetary Policy Committee (MPC) meeting – all set among a risky undertone as Brexit negotiations continue, providing significant risk to the pair.
Have a great day,
Christopher Morriss, The WorldFirst team