Dollar Stronger after FOMC Member Dudley Speaks

The dollar gained last night after the Fed’s Dudley described unemployment and inflation levels as a “pretty good place to be” and predicts wage growth of 3% over the next year or two. This confirms Yellen’s tone last week raising rates and continuing on the planned trajectory by saying “halting tightening cycle now would imperil economy”. This clearly caused strong moves in the dollar against all pairs and pushed the DXY up to 97.61 to close at recent highs. Traders will look to the Fed’s Fischer who speaks tonight to reaffirm Dudley’s comments.

The Aussie has drifted lower with Moody’s downgrading the banks in line with the other ratings agencies. The Cable was relatively unaffected with Brexit talks kicking off in Brussels despite reports of a promising start.

Looking forward we have BOE’s Carney speaking this evening which follows a Sunday Times article that picked a rate hike as soon as August. Given the last BOE vote was 5-3 in favour of keeping rates unchanged. The market will be looking for any indication as to the timing of the BOE’s first rate hike in 10 years. Following Carney we have the SNB’s Jordan speaking, then Fischer to round of this evening’s trifecta.

Rakuten Securities Australia Review