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  • Writer's pictureMike Paterson

US data casts doubts on Fed rate cut

Monday 17 June 2019

Strong revisions to the US Retail Sales on Friday eventually saw a decent rally in the US Dollar as hopes of an imminent interest rate hike this week faded but the jury still remains out. The FOMC make their latest announcement this Wednesday so we haven't got long to wait but it should be a lively week ahead regardless. Th uncertainty means we have on-going risk-off sentiment prevailing.

GBPUSD has fallen back to post lows of 1.2573 helped by some GBPJPY supply and the on-going political risk as the Tory Party leadership contest continues. EURGBP continues to see good two-way business but tightly bound with EURUSD also falling in rapid fashion. GBPJPY has also found the sellers prevailing still as risk-off sentiment continues but support at 136.30 holding the falls so far.

I remain GBP bearish overall and continue to rally-sell as my preferred strategy amid all the uncertainty/indecision including Brexit/political fallout but happy to buy back in the dips as always as ranges remain tight.

EURUSD has finally cleared out some of the dip demand as bulls turned and ran for cover after the US data and ECB noises on inflation and we've tested good support at 1.1200. USDJPY held 108.00 on Friday with the dip demand I mentioned and was happy to stage a decent rally only to fail at 108.70 helped by renewed Yen demand. USDCHF also staged a decent rally as EURUSD retreated but still tightly bound overall as EURUSD and EURCHF both find the expected dip demand.

AUDUSD is still finding sellers on the bleaker domestic outlook and rate cut scenarios along with some good AUDJPY risk-off supply.USDCAD staged a decent rally again on the general USD demand and as the oil price rally faded combined with some good CADJPY selling again.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

Have a good day/week out there one and all.

Interbank Rate 08.19 BST

GBPUSD   1.2577

EURUSD   1.1207

EURGBP   0.8911

GBPEUR   1.1220

GBPAUD   1.8303

GBPCAD   1.6873

GBPZAR   18.6033

GBPHKD   9.7509

USDJPY   108.56

USDZAR   14.7890

EURJPY   121.67

EURCHF   1.1194

EURHKD   8.6910

GBPJPY   136.54

AUDUSD   0.6872

USDCAD   1.3415

USDCHF   0.9985

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