Important Information

You are visiting the international Vantage Markets website, distinct from the website operated by Vantage Global Prime LLP
( www.vantagemarkets.co.uk ) which is regulated by the Financial Conduct Authority ("FCA").

This website is managed by Vantage Markets' international entities, and it's important to emphasise that they are not subject to regulation by the FCA in the UK. Therefore, you must understand that you will not have the FCA’s protection when investing through this website – for example:

  • You will not be guaranteed Negative Balance Protection
  • You will not be protected by FCA’s leverage restrictions
  • You will not have the right to settle disputes via the Financial Ombudsman Service (FOS)
  • You will not be protected by Financial Services Compensation Scheme (FSCS)
  • Any monies deposited will not be afforded the protection required under the FCA Client Assets Sourcebook. The level of protection for your funds will be determined by the regulations of the relevant local regulator.

If you would like to proceed and visit this website, you acknowledge and confirm the following:

  • 1.The website is owned by Vantage Markets' international entities and not by Vantage Global Prime LLP, which is regulated by the FCA.
  • 2.Vantage Global Limited, or any of the Vantage Markets international entities, are neither based in the UK nor licensed by the FCA.
  • 3.You are accessing the website at your own initiative and have not been solicited by Vantage Global Limited in any way.
  • 4.Investing through this website does not grant you the protections provided by the FCA.
  • 5.Should you choose to invest through this website or with any of the international Vantage Markets entities, you will be subject to the rules and regulations of the relevant international regulatory authorities, not the FCA.

Vantage wants to make it clear that we are duly licensed and authorised to offer the services and financial derivative products listed on our website. Individuals accessing this website and registering a trading account do so entirely of their own volition and without prior solicitation.

By confirming your decision to proceed with entering the website, you hereby affirm that this decision was solely initiated by you, and no solicitation has been made by any Vantage entity.

I confirm my intention to proceed and enter this website Please direct me to the website operated by Vantage Global Prime LLP, regulated by the FCA in the United Kingdom

By providing your email and proceeding to create an account on this website, you acknowledge that you will be opening an account with Vantage Global Limited, regulated by the Vanuatu Financial Services Commission (VFSC), and not the UK Financial Conduct Authority (FCA).

    Please tick all to proceed

  • Please tick the checkbox to proceed
  • Please tick the checkbox to proceed
Proceed Please direct me to website operated by Vantage Global Prime LLP, regulated by the FCA in the United Kingdom.

×

Rediscover Your Trading Potential

START NOW >
Watch Reborn a Trader

row

View More
SEARCH
  • All
    Trading
    Platforms
    Academy
    Analysis
    Promotions
    About
  • Search
Keywords
  • Forex Trading
  • Vantage Rewards
  • Spreads
  • facebook
  • instagram
  • twitter
  • linkedin
  • youtube

Dollar makes new lows after hawkish ECB and BoE meetings

Vantage Updated Updated Thu, 2023 December 14 11:28
Dollar makes new lows after hawkish ECB and BoE meetings

Headlines

* ECB keeps rates on hold but united on seeing rate cuts later than market

* BoE holds rates with warnings of a “way to go” on inflation

* US retail sales unexpectedly rise in solid start to holidays

* Dollar hits levels last seen in August as Treasury yields continue to sink

FX: USD fell again as the fallout from the Fed’s dovish pivot carried on. The index made a fresh low at 101.77, taking out the November low at 102.46. US data was strong with retail sales beating estimates. Notably the control group also topped expectations, which is normally a positive sign for GDP. Initial jobless claims dropped towards 200k, another measure that the labour market is not cooling.

EUR surged higher above 1.10 before settling just below the figure. The November top is at 1.1017 with next resistance at 1.1064.

GBP was also an outperformer as the BoE kept its guard against any rate cuts. Three members opted to vote for hikes, and it reiterated its November guidance. Cable hit levels also last seen in August. Near term support is 1.2720.

USD/JPY fell for a third day, through the 200-day SMA and made a fresh low at 140.94. Treasury yields dropped sharply with the 10-year declining well below 4%.

AUD popped up to 0.6728 before closing just below 0.67. The relatively downbeat risk tone capped the upside despite a strong Aussie jobs report overnight. November employment crushed estimates, adding 61.5k jobs, well above the 11.5k expected.

Stocks: US equities made more new highs but closed off their tops. The S&P 500 added 0.27% to settle at 4720. The tech-laden Nasdaq 100 finished 0.15% lower to finish at 16,538. The Dow moved up 0.43% at 37,248. Energy and real estate were the top sector performers with consumer staples and utilities the laggards. Those first two sectors have underperformed this year. But investors are becoming more confident that a soft landing in the US economy can be achieved. The Dow closed at a second straight record high while the S&P 500 neared its record high.

Asian futures are in the green. APAC stocks traded mostly higher on Thursday. The Nikkei 225 enjoyed initial gains but then couldn’t keep above 33,000 amid selling in the banking sector. The stronger yen also didn’t help. The ASX 200 was led by rate sensitive sectors following the drop in yields.

Gold pushed north again and closer to $2050. Falling Treasury yields and the dollar are a tailwind. Markets price in around five 25bp Fed rate cuts next year.

Day Ahead – Digesting ECB and BoE Meetings

Both the ECB and Bank of England did what we thought. They kept rates unchanged at their meetings and railed against rate cut bets. The latter said rates will be kept restrictive for an extended period of time due to still high inflation and wage growth.

Later on and also as expected, the ECB pushed back against rampant rate cut expectations. The bank left rates at 4% but said they wouldn’t let their guard down on inflation. There were dovish hints in the statement and the new updated staff projections suggested growth risks were tilted to the downside. However, that doesn’t mean the bank wants to see rate cuts soon. This saw the euro rise sharply.

Chart of the Day GBP/USD surges through 1.27

Policy divergence is widening between the moderately more hawkish central banks like the BoE and the Fed’s dovish pivot. Going forward, data will need to back this up to sustain the gains seen in the respective currencies.

Cable finished above the peaks seen in late November and early December around 1.2725 after the hawkish hold by the BoE. Price action isn’t yet overbought with bullish trend signals still solid. Targets above include 1.2850 and 1.2905 if the pair can stay above the prior tops.