Volatility On Forex Markets Within Narrow Ranges Due To Central Banks

There was some volatility on Forex markets yesterday (within narrow ranges) as investors digested a host of central bank meeting minutes. The BoE minutes were, as expected, more dovish in tone. They suggested that we could see a slower path for recovery in UK inflation. Thus, they continued to indicate that the MPC is in no hurry to start tightening monetary policy. Initial reaction to the minutes saw sterling come under some pressure during the day.

At the same time, the latest ECB meeting “account” raised similar concerns about weak price pressures. Overall they suggested that the Central Bank now feels that the downside risks to its outlook for inflation have increased. This could serve to increase speculation of further policy easing in the Eurozone (i.e. increased QE).

In overnight news, the latest FOMC minutes did not throw up any major surprises, confirming that the Fed is in wait-and-see mode. Contrary to comments made by some FOMC members, there was no indication in the minutes that the decision to keep rates on hold had been a ‘close call’. However, given some disappointing US data released after the Fed meeting (i.e. payrolls) the minutes were somewhat overlooked. As a result dollar reaction was limited.

As things get underway this morning, cable (GBP/USD) has moved back up towards $1.54, while the EUR/USD pair is back in the upper half of the $1.12-1.13 range. Meantime, EUR/GBP continues to trade around the mid 73p mark.

In the day ahead, there is a sparse look to the data/events calendar. Thus, the main FX pairs could continue to trade within narrow ranges as we head into the weekend.

$7 Trillion Dollar later, pressure loom for Central Banks

Yesterday and today, the major banks and central bank heads are together in Lima, Peru to discuss the world economy. The IMF was met with stiff comments about there is no room for error in current economy where commodity prices are hurting emerging markets and China is struggling.

Corporate tax avoidance was another key point during the meeting. Figures estimate that between 100 – 240 billion dollars is not collected globally each year because of tax havens which corporations use to manage their money within these jurisdictions. You can read more on Reuters

Credit Suisse reduces exposure due to lack of fluctuation

Credit Suisse is changing its portfolio as volatility or fluctuations in the currency market become smaller. For instance the Dollars has lost 0.5% since March against a basket of 10 other major currency.

Robert Parker who works for Credit Suisse spoke to Blomberg. Mr Parker expects the Euro to trade between $1.04 and $1.16 during the first six months of 2016. Read more

Today Barry Dowling our Managing Director is part of a team of 30 people which will undertake a 230 kilometre cycle from Greystones, Wicklow to Rosslare, Wexford then onto Llanelli to Cardiff. The cycle is in aid of IRFU Charitable trust, Focus Ireland and Team Jonathan Ranson.

If you would like to contribute to the total amount raised please call our offices today. TransferMate will match the contribution you make. Thank you. 

Please check out our Contact page