Are the Summer Doldrums here?! It sure looks like it as the major currency markets held a ranging pattern up until Friday, where the Dollar snuck in a quick rally to take the the top spot among the majors going into the weekend.
Notable News & Economic Updates:
Summer Doldrums Are Here
Despite a steady stream of news and economic updates, there were no major price action moves to see as equities, currencies, and gold stayed relatively rangebound this week.
It’s likely that not only are we seeing the seasonal ‘Summer doldrums’ in play with traders likely away from their desks and no major headlines hitting the wires lately, but those who were around to trade may have stayed on the sidelines in anticipation of the latest inflation numbers from the U.S.
The CPI number came in hot on Thursday, coming in at 5.0% y/y, which was mostly expected and likely why we didn’t see a reaction from the markets. Apparently, they weren’t hot enough to change the perception that the Federal Reserve will not make moves or hints to tighten monetary policy at next week’s meeting.
Oil made a choppy move to the upside as OPEC’s expectations of higher demand in 2021 outweighed the rise in fuel inventories and news of the U.S. dropping sanctions on 3 former Iranian officials and two companies.
Crypto market volatility continued to subside, but was a mover this week off of headlines that included the recovery of ransom bitcoin from the Colonial pipeline hack and the move by El Salvador to make bitcoin legal tender.
And again, currencies traded sideways for most of the week, with the pop higher in the Greenback on Friday as the only move of note. This rally doesn’t appear to have a direct catalyst, and with expectations of the Fed holding on it’s “transitory inflation” stance next week, it was odd move. Whatever the case may be for USD gains, it was enough to take the U.S. dollar into the top spot among the major currencies at the Friday close.
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This post first appeared on babypips.com