Talking Points:
- Today marks the end of Q2, and the reversals that have shown in the US Dollar, EUR/USD[1] and GBP/USD[2] have been notable, especially considering the prior year-plus trends that were previously showing in each market. As we move into the second-half of this year, the prospect of continued volatility remains as markets contend with a combination of a persistently-hawkish Federal Reserve, a dovish European Central Bank and a Bank of England with quite a few questions surrounding the August and November rate decisions set for later this year.
- In Q2, the major rate decisions of focus are the Fed’s September meeting in which markets are currently holding a 72.3% probability of a 25 basis point hike. The ECB’s September rate decision will likely be important, as well, as this is where the bank will announce details on execution of stimulus-taper. The August Bank of England rate decision is a ‘Super Thursday’ event, and if we don’t get a hike there, the focus will then move to November. But – inflation will remain key around the BoE, so if we see continued deterioration in that data point, odds for rate hikes will likely slim, and this could add even more pressure to the Pound.
- DailyFX Forecasts on a variety of currencies such as the US Dollar[3] or the Euro[4] are available from the DailyFX Trading Guides page[5]. If you’re looking to improve your trading approach, check out Traits of Successful Traders[6]. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide[7].
Do you want
