GBP - keep on selling

GBP/USD should be sold for two reasons. First, the published on Wednesday FOMC meeting minutes did not disappoint investors, because they was not negative, but rather pointed to the need to raise interest rates. In the current environment, where the trend is gaining momentum in the dollar (the dollar index USDX basket is now at the maximum for the last 7 months) the absence of bad news from the US is in itself positive. Secondly, strengthening the greenback put pressure on the commodity market instruments, primarily for oil, as the value of all commodities are denominated in the US currency. Brent crude oil can not confidently fix to a maximum of the current year at $52.99/barrel and in the near future we can expect a reduction of quotations to the psychological level of $50/barrel, which will increase the pressure on the sterling. Against this background, during the day we should opened short position on the growth of quotations in the area of 1.2200/1.2250 and take profit at the level of 1.2120.

BTMU waiting moderate growth of EUR/USD, but not more than 1.15

Until the meeting of the FOMC on September 21 is less than two weeks and the only thing that can improve the current low expectations for a rise in US interest rates, is the publication of strong data from the US, according to analysts.
Among the important statistics that will come out next week, the most significant is data on retail sales that will come out on Thursday and CPI on Friday.

Today are expected the speaches the heads of the Federal Reserve Bank of Boston - Rosengren and Dallas - Kaplan. As Rosengren is voting member of the FOMC, his speech seems to analysts more important.

The change of rhetoric of Rosengren to more decisive can significantly affect market expectations, say analysts. His last speech was on 31 August and then he made some interesting comments, that expressed concern, that the too long period of very low interest rates may affect the market.

Currently, analysts do not see any prerequisites for changing the current situation on the currency market and are waiting for the growth of EUR/USD, which however will be limited to the level of 1.15 dollars, they predict.

FOMC and oil

Last night, was published the protocol of April meeting of the Federal Open Market Committee of the USA. Despite the soft rhetoric prevailing in the text of the press release, the content of the published protocol significantly increased the likelihood of a rate hike in the United States and caused a wave of selling in high-risk assets. According to the text of the protocol, the voting members of the Fed reported a decline in braking the risks of the global economy and the recovery in oil prices significantly improved the position of the US oil and gas companies, specializing in the extraction of raw materials from shale deposits. If trends continue, it could serve as a basis for a gradual tightening of monetary policy. FED will continue to monitor the situation in the US labor market and the change in retail prices. According to Bloomberg, the probability of a rate raise by 0.25% at the June meeting of the Committee has increased from 13% to 33% in the last day.
Oil prices retreated from their maximum values ​​for the current year against the strengthening of the US dollar and an unexpected increase in US oil stocks. According to the weekly report of the US Department of Energy, crude oil inventories increased by 1.3 mln. barrels while the market was expecting a drop in this indicator at 3 mln. barrels. Also, the additional pressure on oil
contracts had a slowdown in the reduction of production in the US for only 11 thousand barrels over the past week. Following the oil price, quotations of European oil and gas companies are also falling.