Dollar drifts higher ahead of Fed meeting and UK election
Scott Petruska, CFA " | December 11, 2019
The dollar drifted higher as traders await today’s FOMC announcement, where nothing of consequence is expected, and tomorrow’s UK election, where recent opinion polls suggest a tighter race than expected just a few days ago. New tariffs on China are scheduled for December 15. Equities are steady and bond yields off slightly.
December 11, 2019
EUR/USD 1.1095 GBP/USD 1.3173 USD/CAD 1.3233 AUD/USD 0.6847 USD/JPY 108.71 USD/CNH 7.0361 USD/ILS 3.4728 USD/MXN 19.2108 USD/CHF 0.9857 USD/INR 70.8400
The dollar is slightly higher ahead of today’s FOMC meeting, tomorrow’s UK election, and Sunday’s potential Chinese tariffs. Traders do not seem to have built any bad news into their positioning, and are in a wait-and-see mode.GBP
The UK pound fell overnight as opinion polls show the Conservative Party’s margin of victory over the Labor Party narrowing substantially. If the Conservatives win the most seats in Parliament, but don’t win a majority, the resulting “hung parliament” will lead to continued uncertainty in the UK. Polling stations close 10pm Thursday night in the UK, votes will then be counted and the winner announced in the early hours Friday morning (late Thursday night in the US).EUR
In a relatively quiet day of trading, the euro drifted lower, but remains within striking distance of a critical range of resistance between $1.11 and $1.12. Traders await tomorrow’s European Central Bank meeting, the first with Christine Lagarde as president.CAD
The Canadian dollar moved little overnight. Traders await a speech tomorrow by Bank of Canada Governor Stephen Poloz.ASIA/PACIFIC
The Chinese yuan was stable overnight, despite heightened tensions surrounding Sunday’s planned 15% tariffs on about $160 billion of Chinese imports. Rumors are circulating that Trump may postpone them, as both parties seek completion of the ‘phase one’ part of a US-China trade deal.