Today’s Key Market Drivers – 19th September 2017

The Yen continued to fall on Monday as global stock markets continued to make further gains and traders saw no reason to buy the safe haven currency. The US Dollar also gained before Thursday morning’s important statement from the US Fed and Janet Yellen’s press conference. The US Fed has said that it would like to raise the official interest rate but has said that inflation needs to improve further before another rate rise happens. What I think may spook markets is the Fed’s decision to announce when and how it will begin to sell its trillion-dollar balance sheet that it accumulated after the GFC. It said earlier this year that it would like to begin to sell down the assets that it now holds but up until this point it has not told the market when and how. I think the US Fed may use Thursday’s statement and press conference to tell the market the “when and how.” How the market reacts to this if they do nobody really knows but I do expect significant volatility following the Fed’s statement on Thursday morning at 4.00am AEST.

CNBC says the Pound weakened on Monday after Mark Carney the BOE Governor said that any interest rate increases would be limited and gradual. The Canadian Dollar also lost ground after Deputy Governor Lane said the Central Bank would pay close attention to how the economy reacts to higher interest rates and any further rate hikes would be data dependent. Traders took this to mean the BOC may now be on hold for a period of time.

Today’s economic calendar shows the RBA monthly minutes released at 11.30am will be a focus in the Asian trading session. The Euro Zone Economic Sentiment survey won’t likely move the Euro too much even though its marked as high impacting. The good news is mostly baked into the Euro now with the ECB confirming it will likely taper its stimulus program in October so it will take some exciting “new” news to force the Euro to new yearly highs. The markets are eagerly waiting for the US Fed’s statement on Thursday morning at 4.00am AEST.

 

About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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