President Trump's latest attack on Fed independence hits all things US..
| GBP
| The Pound starts the new week at the same levels as this time last week.
It was a week of two-halves really with Sterling enjoying three small consecutive daily gains against the majors and then for them all to be wiped on day 4 (nothing new here).
This week's trading will be dominated by Trump & US data (see more below) so expect volatility this week, just not from anything UK/£ related.
Whilst Trump's actions have caused nervousness amongst traders (Gold up 1.5% so far today), this isn't so far a variable that hurts GBP not being a safe-haven currency. It's solely hurting the USD and US stocks (exactly the same as last time) instead.
With nothing due out of the Euro-Zone this week and with just GDP being released by the UK (Thursday), we expect to see GBP v EUR trade sideways.
GBP v USD has a chance to push on further this week and reclaim last Tuesday's highs if the Trump v Fed saga continues.
EUR With literally nothing worthwhile being released by the Euro-Zone again this week, the single currency will be moved by events elsewhere. If traders deem the Trump attack to be a real global issue, the Euro as a stable safe-haven currency will increase in value across the board.
USD Here we go again.
Last week it was geopolitical tensions, this week its an attack on the Fed (again), the Trump chaos train shows no sign of slowing down.
US stocks are down and traders are nervous as to what happens next with Greenland, Iran and of course the Federal Reserve after last night's news that the DOJ has served a subpoena on the Fed and threatened a criminal indictment against its Chairman Jerome Powell.
Powell's response to the incredible attack was steadfast and accusatory, suggesting the move was once again about the crucial independence of the Fed coming under attack by the President who wants interest rates much lower and to move much faster than they currently are and to control at the governmental level rather than as a separate entity (historically).
The Fed looks at setting interest rates based on the full spectrum of economic conditions in the US (mainly) and globally. This includes the 3 key pillars; economic growth, jobs and inflation.
The concern many analysts are suggesting if Trump gets his way with interest rates is that inflation spikes and quickly.
Elsewhere, earnings season in the US kicks off this week too with big banks reporting and a key release from TSMC (a bellwether for how chip-makers might fare this year), so plenty of financial volatility is expected this week.
Please check out the main events of the week below..
|
|