G10 FX Week Ahead: Can the Fed save the dollar?

The highlight of the week ahead will be the release of the January FOMC minutes, a host of Fed speakers and then the semi-annual monetary policy report. Can the Fed turn this dollar bear trend around? 

We’re clearly witnessing a weak dollar environment, with early signs that investors are demanding concessions (both in FX and yields) to hold US bonds. After a  market holiday on Monday, the US focus will shift back to the Fed story. The minutes of the Jan FOMC meeting are released on Wed, with several Fed speakers then to be heard before the release of the semi-annual monetary policy report on Friday. This is all preparation for the main event on Feb 28th, when new chair Powell testifies to Congress.
While the Fed tone may be a little more hawkish, a lot of Fed tightening is already priced this year, thus the dollar need not rally. In the EZ, we’ll also see ECB minutes (Thurs) plus German IFO and flash Feb PMIs across the Eurozone. ECB minutes may try to exaggerate concerns over FX volatility, but we suspect any EUR/USD correction proves temporary – and that EUR/USD could test a big trendline just above 1.2650. Read More @ https://think.ing.com/articles/g10-fx-week-ahead-can-the-fed-save-the-dollar/

EURO-ZONE FOCUS – Uncertainty reigns in final polls ahead of Italy election

Silvio Berlusconi’s center-right bloc has a clear lead ahead of Italy’s parliamentary election on March 4 but is unlikely to win a working majority, a batch of final opinion polls showed on Friday, pointing to possible political deadlock. Read More @ https://www.reuters.com/article/us-italy-election/uncertainty-reigns-in-final-polls-ahead-of-italy-election-idUSKCN1G010J

The yen is ignoring Japan’s apparent efforts to halt its rise – what’s next?

After all, Kuroda has been a key architect of the monetary policy portion of the prime minister’s “Abenomics” approach—characterized by ultralow interest rates, quantitative easing and tight control of the Japanese bond yield curve—which should lead to a weaker currency. The yen USDJPY, +0.15% however, continues to rally. On Friday, the dollar-yen pair hit a new 15-months low of ¥105.55. One dollar last bought ¥106.08, down from ¥106.12 late Thursday in New York. Read More @ https://www.marketwatch.com/story/the-yen-is-ignoring-japans-apparent-efforts-to-halt-its-rise-2018-02-16?siteid=rss&rss=1

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