Two Federal Reserve officials expressed confidence that they will be able to pull off a relatively smooth interest-rate hike when the time comes despite fears of an abrupt market reaction and the central bank's reliance on lightly tested policy tools.
After Monday’s big dollar-bullish move, the foreign exchange market has been relatively mixed over the last 48 hours, not coincidentally mirroring the uncertainty traders are feeling toward future Federal Reserve policy.
U.S. consumer prices increased in October after two straight months of declines as the cost of goods and services rose, signs of firming inflation that further support expectations that the Federal Reserve will raise interest rates next month.
After some classic minimal data consolidation in the forex markets last week, traders are eagerly awaiting some top-tier economic reports (and hopefully accompanying volatility) this week. The first of these key reports, the U.S. October Consumer Price Index (CPI), was just released.
Markets were already in trouble before Friday and the bombings in Paris certainly shouldn’t help. In early Sunday evening trade, Australia was down over 1% while tech and Europe nearly 1% but all were paring losses. It could’ve been a lot worse.