Central Banks meetings to steer market direction
Currencies Direct March 7th 2016 - < 1 minute read
The US economy continues to strengthen as shown by Friday’s non-farm payroll data, comfortably beating expectations at a reading of 242,000. Job numbers have continued to rise steadily, though gains for the greenback were short lived as wage data continues to disappoint and remain subdued. Trade balance numbers released showed that deficits have widened as the euro and sterling climbed against the dollar. This was mostly on the basis that the currencies were oversold. Markets are likely to be in consolidation mode in the week ahead as central banks convene this week including the Bank of Japan, New Zealand and the European Central Bank. President of the ECB Mario Draghi will be most keenly watched on Thursday, as he is expected to announce a cut in deposit rates for the Eurozone. With inflation remaining below forecasts, another liquidity injection and adjustment to the quantitative easing program also looks likely on the cards from the Eurozone. In other economic data, German factory orders drive short term direction for the euro whereas for the greenback, a speech from Fed Reserve Member Stanley Fischer will be keenly watched for any hints on the path of US monetary policy.
Sterling makes some gains
Sterling has made a slight comeback posting gains throughout Friday against the greenback. These gains were more likely to be on disappointing US data and the pound having been oversold. With no economic data out from the UK today, Sterling will look for cues from the US and Eurozone for further direction. Moving ahead, economic data prints will be closely watched as well as any new developments from the campaign for Britain to leave or remain in the EU.