FX market outlookPosted on Monday, May 29 2017 at 8:07 am GMT+0000
Dollar boosted by Fed speaker and US GDP; pound rebounds after latest election poll.
The dollar was boosted after comments by Federal Reserve Bank of San Francisco President John Williams and on an upbeat US GDP. The pound rebounded after the latest UK election opinion poll.
An ICM poll for British newspaper The Sun released over the weekend showed Prime Minister Theresa May’s Conservatives with a 14-point lead ahead of the Labour Party. The latest poll follows from one published last Friday showing a narrower lead of just 5 points, which led to a broadly weaker pound. Cable rebounded in early Asian trading today from a one-month low of $1.2774 to a session high of $1.2833.
The dollar index was steady during the Asian session after rising on Friday to back above 97 points following upbeat US GDP data. The greenback was given added support after comments by Fed official John Williams who was speaking in Singapore over the weekend. Williams said he expects a total of three rate hikes this year by the US central bank.
There will be a lot of focus on the dollar this week as a raft of US data are scheduled to be released. The all-important non-farm payrolls report is due on Friday for the month of May, while personal income and spending data are expected on Tuesday. The ISM manufacturing PMI report is out on Thursday. Meanwhile, more FOMC members will be speaking at events this week, and include Lael Brainard and Patrick Harker.
News of another North Korea missile test appeared to be shrugged off by the markets and had little impact on the safe haven yen. The dollar was steady against the Japanese currency, trading to as high as 111.46 yen in Asia.
After Friday’s pullback against a resurgent dollar on Friday, the euro remained below the key $1.1200 in Asian trading today. Focus turns to European Central Bank President Mario Draghi who will be speaking to the European Parliament later today.
Aside from Draghi’s speech, the economic calendar will be quiet today due to holidays in Europe and the US.
In commodities, gold hovered close to a near four-week high of $1,269.31 an ounce hit on Friday. WTI oil rose to as high as $50.01 a barrel in Asian trading.