Market Review – Fundamental Perspective 28 September 2017

The British pound continues to head lower this week, and has posted losses in the Wednesday session. In North American trade, GBP/USD is trading at 1.3407, down 0.38% on the day. On the release front, British CBI Realized Sales soared with a reading of 42, crushing the estimate of 6 points. In the US, data was mixed. Durable Good Orders sparkled with a 1.7% gain, well above the estimate of 1.0%. Core Durable Goods slowed to 0.2%, matching the estimate. Pending Home Sales was unexpectedly soft, posting a decline of 2.5%, compared to an estimate of -0.5%. On Thursday, BoE Governor Mark Carney will speak at a BoE conference in London. The US will release two key events – Final GDP and unemployment claims.
USD/JPY has posted gains on Wednesday, continuing the upward movement we saw on Tuesday. In North American trade, the pair is trading at 112.81, up 0.54% on the day. On the release front, BoJ Governor Haruhiko Kuroda will speak at a conference in Tokyo.
The Dollar made its presence known across the currency markets on Tuesday, after hawkish comments from Federal Reserve Chairwoman Janet Yellen, bolstered expectations of another US rate hike in 2017.
Investors who were anticipating higher US interest rates, cheered after Yellen stated it would be "imprudent" to keep monetary policy on hold until inflation is back to 2%. Yellen also said that she thinks depressed inflation, witnessed in the States this year, is "probably temporary and will likely reach the central bank's golden 2% target over the next few years". With hawkish statements from various Fed policy-makers giving the thumbs up to higher US rates, the Greenback has regained some of its mojo. Dollar bulls are making an appearance, and with the Fed fund futures showing an 83% probability that they will raise rates in December, a further upside is on the cards.

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