Lack of data and geopolitical tensions mute volatility

Currencies Direct June 24th 2014 - < 1 minute read

Despite factories and manufacturers in the US reporting the
fastest expansion in four years, dollar volatility has been muted
amidst geopolitical tensions exacerbated by bets that the Federal
Reserve will keep interest rates low for an extended period of
time. Also, data released yesterday showed existing home sales in
the US rose a further 4.9 per cent in May. Though the US economy
has picked up, markets expect to see some prospect of change in the
trajectory of US monetary policy and will keep a close eye as
Federal Reserve member Plosser will make a speech later today on
economic outlook and monetary policy. Consumer confidence and new
home sales are the other data prints out today from the US.

The Eurozone
continues to grapple with its problems which were highlighted in
manufacturing readings from Germany, France and the broader euro
region yesterday as they fell short of expectations, adding to
current weakness in the shared currency.
chief Mario Draghi has also hinted that interest rates are
likely to stay at record lows for at least another 18 months as
inflation rates remain at a dismal 0.5 per cent way off the
targeted 2 per cent level. Data out today is the German Business
Climate and sentiment surveys.

Sterling continues to outperform all its major counterparts as
the UK is all set to be the first of the major economies to
increase interest rates. A hawkish BOE governor, Mark Carney is set
to meet today with the Treasury Select Committee as he comes close
to the end of his first year in office and the only data print on
the economic calendar is loans for house purchases. Currently
GBP/USD opens at 1.7025.

For all the latest news on currency exchange be sure to check out

Daily Podcasts.

Written by
Currencies Direct

Select a topic: