Currencies | Jan 17 2017
Market analysts at FXCM asses likely responses in major currencies and the gold price as the Trump presidency looms.
by Ilya Spivak, Sr. Currency Strategist ; Michael Boutros, Currency Strategist ; David Song, Currency Analyst ; Christopher Vecchio, Sr. Currency Strategist ; Tyler Yell, CMT, Forex Trading Instructor ; James Stanley, Currency Strategist ; Renee Mu, Currency Analyst and David Cottle, Analyst
Financial markets face the return of high-profile event risk in the week ahead but US policy uncertainty may keep all eyes on the nearing Trump inauguration.
US Dollar Forecast – US Dollar May Fall Further as Trump Inauguration Nears
The US Dollar may continue to weaken as disillusioned traders continue to scale back exposure to the so-called “Trump trade” ahead of the nearing Presidential inauguration.
Euro Forecast – EUR/USD Set to Face Neutral ECB, Even as Data Improves
A further improvement in the Euro’s fundamental drivers in the short-term continues to shield the single currency from longer-term political concerns. This week, attention turns to the ECB for their first meeting of 2017.
Japanese Yen Forecast – Rising U.S. CPI, Hawkish Fed Rhetoric to Tame USD/JPY Pullback
The failed run at the December high (118.66) keeps the near-term outlook for USD/JPY tilted to the downside, but the key developments coming out of the U.S. economy may prop up the exchange rate next.
British Pound Forecast – GBP Clings to Support Ahead of Inflation, May’s Brexit Speech
Ever since the Brexit referendum in June, markets have volleyed the various prospects that might come from the actual execution of the split from the European Union.
Canadian Dollar Forecast – Canadian Dollar Looks to Poloz for Further Strength
The Canadian Dollar has been a resilient currency at the start of the year. Much of the strength is due in part to Oil’s consistency above a long-term focal point on the chart.
Australian Dollar Forecast – Australian Dollar Fightback Can Continue
Is the Australian Dollar in a sweet spot? Well, that might be premature optimism but it’s certainly in a better place than it was back in November.
Gold Forecast – Weakness to be Viewed as Opportunity- US CPI on Tap
Gold prices are higher for a third consecutive week with the precious metal up 1.8% to trade at 1194 ahead of the New York close on Friday.
Chinese Yuan Forecast – Chinese Yuan Eyes on China 4Q GDP, Davos Forum
This week, the offshore Yuan remained stronger than the onshore Yuan and the PBOC’s guidance. On Friday, the USD/CNY closed at 6.8984, slightly weaker than the Yuan fix set on Friday of 6.8909.
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