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Markets Await ECB Policy Meeting

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USD

On Wednesday, the Greenback edged down vs. a basket of currencies after Federal Reserve Vice Chairman Stanley Fischer announced his resignation and U.S. President Donald Trump’s  surprising deal with Democrats in Congress to pass aid for Harvey, an extension of the debt limit for around three months until mid-December. Such deal could eliminate the near-term risk of a government shutdown.

  • The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.20% at 92.107.

EUR

The single currency managed to maintain this week’s slim gain ahead of the European Central Bank’s policy meeting happening later in the day, with the ECB’s policymakers who could strike a cautious tone about the single currency’s strength.

Additionally, traders are eagerly awaiting the European Central Bank's (ECB) latest update as they are looking for ECB chief Mario Draghi to take an action plan on so-called Quantitative Easing through bond buying after today’s meeting. Moving forward, , market participants will look forward to the ECB Marginal Lending Facility that is expected to remain unchanged at 0.25%.

GBP

The Sterling pound rose vs. its major rivals on reducing negative bets before parliament discusses the European Union repeal bill today.

GBP/USD rose as much as +0.05%, to settle at $ 1.3049.

JPY

The Greenback fell as much as -0.24% vs. the JPY, to settle at 108.97, amid concerns over the Korean peninsula and lingering worries about U.S. President Donald Trump’s economic policies.

On the economic calendar for Thursday, traders are awaiting Japan’s final GDP numbers for 2Q 2017 and trade balance (BOP basis) data for July, scheduled to be released overnight.

Gold

Gold prices settled below their highest level in about a year, as traders awaited the results of the European Central Bank meeting later in the day.

Traders believe the ECB could wait until October before announcing a tapering of its €60 billion of monthly asset purchases.

The precious metal traded lower yesterday following news that U.S. President Donald Trump and congressional leaders unexpectedly agreed to hike the government debt limit until 15th December. After easing 0.3% Spot gold was little changed to settle at $1,334.06, while Gold Futures - Dec 17 rose as much as +0.26% to settle at $ 1,342.47.

Oil

Oil prices were backed as U.S. Gulf Coast refineries reopen in the wake of Hurricane Harvey.
Crude Oil WTI rose as much as +0.24%, to settle at $ 49.28, while Brent Oil Futures - Nov 17 was up 0.65% at $54.55. Moving forward, traders anticipate U.S. Crude Oil Inventories data for the First week of September.

The most important economic events:

  • EUR European Central Bank Rate Decision (SEP 07): (GMT 11:45) – Important – Forecast (0.00%) – Previous (0.00%).
  • EUR ECB Marginal Lending Facility (SEP 07): (GMT 11:45) – Important – Forecast (0.25%) – Previous (0.25%).
  • EUR ECB Deposit Facility Rate (SEP 07): (GMT 11:45) – Important – Forecast (-0.40%) – Previous (-0.40%).
  • EUR ECB Asset Purchase Target (SEP): (GMT 11:45) – Important – Forecast (EU60b) – Previous (EU60b).

We wish you all the best in your trading activities. For any further assistance, please do not hesitate to contact us at clientservices@ICMCapital.co.uk

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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