Dollar up for fourth day ahead of FOMC minutes

The US dollar is higher across the board as the short-covering rally continues. The Dollar Index is now up for the fourth consecutive day. Barring a surprise sell-off later on today in reaction to the FOMC minutes, the greenback could be on the verge of a more significant comeback. Thanks to a stronger economy, the Fed looks set to tighten its belt more aggressively this year. This should help push bond yields higher and support the dollar, especially against her weaker rivals. While the pound may not be so weak any more, it took a dive towards $1.39 from around $1.40 this morning following the release of mixed-bag UK employment and wages data.

Mixed UK data weighs on pound

As a reminder, average weekly earnings in the UK rose 2.5% in the three months to December compared to the year before. This was in line with expectation and unchanged from the previous month. Earnings excluding bonuses also printed +2.5% but this measure of wages was actually slightly better than +2.4% expected and marked an increase from +2.3% previously.  However, the slightly positive wages data was overshadowed by weakness in the jobs sector. The unemployment rate unexpectedly rose to 4.4% from 4.3% as employment increased by 88,000 versus 165,000 expected in the three months to December. However, a key leading jobs market indicator showed a positive surprise: UK jobless claims unexpectedly fell by 7,200 last month.

So, it wasn’t all doom and gloom. However, this was not enough to support the pound, which was pressured further by ongoing Brexit uncertainty amid reports that Britain is demanding an open-ended transition period before officially leaving the EU. Still, given that today’s data were not too bad and with the Bank of England turning hawkish by the day, the pound’s weakness could be short-lived, especially against currencies where the central bank is still more dovish than the BoE.

FOMC minutes eyed

However, against the US dollar, the GBP could extend its declines in the near-term given the recent dollar strength. Consistent improvement in US data means the Fed looks set to raise rates more aggressively this year. We will get a glimpse of exactly how hawkish the Fed really is later on today, when the FOMC’s last meeting minutes are released. This has the potential to move the dollar sharply in one or the other direction. If the minutes convey hawkish comments then the dollar could easily extend its rally, while anything surprisingly dovish could have the opposite impact. But my worry is that everyone is expecting to see hawkish minutes and this is being reflected in the dollar. So, the minutes may have to be significantly more hawkish than anticipated, otherwise profit-taking could lead to a retracement in the dollar’s rebound.

GBP/USD’s lower lows and lower highs point to potential drop to 1.3650

But if the dollar continues to remain bid post FOMC minutes then the cable might snap, especially as it is struggling to get past its pre-Brexit levels around the 1.40s. With GBP/USD recently forming a couple of lower highs and a lower low around these historic resistance levels, we think that a drop towards 1.3650 – the 2017 high – could be on the cards in the coming days. That being said, we would be quick to drop our short-term technical bearish views in the event the cable goes back above the pivotal 1.40 level again.   


Source: eSignal and FOREX.com.

本レポートに記載されている情報や見解は、一般的な情報としての使用のみを目的としたもので あり、通貨、CFD、その他あらゆる金融商品の、購入や売却に関する勧誘や依頼の意図は全くあ りません。本文書に盛り込まれている、いかなる見解や情報も、予告や通知なく変更することが あります。本文書は、特定の投資目的や、何らかの財務的背景、特定の受領者の意思などに沿っ て書かれ配布されたものではありません。本文書内で引用・言及されている、あらゆる過去の価 格データ・価格推移データは、当社独自の調査や分析に基づいており、当社はそのデータの提供 元やそのデータそのものの信頼性につき、いかなる保証もせず、また筆者や訳者、各国の支社・ 支店も、本文書の内容の正確性や完全性についても一切保証しません。本文書については英語版 を原版とし、翻訳版と原版で相違がある場合には、原版の内容が優先するものとします。本文書 の内容に基づく直接または間接の損失、そして本文書を信頼したことによる、いかなる人物や団 体が結果的に引き起こした損失についても、当社は一切その責を負いません。

先物取引、先物オプション取引、外国為替証拠金取引(またはFX)、CFD、その他、入金額より もレバレッジをかけて、より大きな金額で取引をする金融商品には、当初入金額を超える大きな 損失を被るリスクがあり、すべての人に適するわけではありません。レバレッジを大きくして取 引すると、その分リスクも高くなります。金スポットや銀の取引は、米国商品取引法(U.S. Commodity Exchange Act)の規制で保護されていません。また、差金決済取引(CFD)は米国 在住者の取引は許可されていません。外国為替証拠金取引(FX)や商品先物取引を行う前には、 投資目的、投資経験、リスク許容範囲等について十分検討する必要があります。本文書内にある、 いかなる見解、ニュース、調査、分析、価格その他についても、「本文書を読むいかなる人物や 団体も、FOREX.comが、投資、法的、税務に関して助言するものではないことを理解している」 ことを前提として、一般的な情報として提供されるものです。いかなる投資、法的、税務に関す る事柄についても、適切な専門家や助言者に相談をしてください。FOREX.comは、米国の商品先 物取引委員会(CFTC)、英国の金融行動監督機構(FCA)、オーストラリアのオーストラリア証 券投資委員会(ASIC)、日本の金融庁の規制を受けています。