| DAILY FOREX ANALYSIS BY CMC MARKETS |
Dollar pressured by consumer data, Bernanke speech awaited.
August 21st - The dollar has found itself under pressure across the board as consensus mounts that the US will now leave interest rates unchanged for an extended period of time. This is being driven largely by Friday’s disappointing Michigan consumer sentiment survey - the latest in a line of downbeat economic readings out of the US – and although traders will be looking for further key numbers as the week continues, expectations remain somewhat tame. With central bankers from across the globe due to meet in Jackson Hole this week, Ben Bernanke’s speech – scheduled for Friday – will be closely watched for any suggestions as to how the remaining inflationary pressures will be tackled, whilst news of existing and new home sales (Wednesday & Thursday respectively) may also provide some direction. Essentially however we seem to be back at the situation where the longer term outlook for US interest rates is very modest whilst elsewhere – as we’ve already seen today in China – yields are going to pick up. As a result, unless we hear some bullish noted from Bernanke later in the week, the dollar may continue to struggle to find popular support amongst investors.
Andy Cottrill
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