US Bank Earnings Holds USDs Fate

Daily Forex Fundamentals | Written by AC-Markets | Oct 12 09 08:38 GMT |

Market Brief The USD was able to claw back some losses in the Asian session, as regional equity markets failed to keep risk appetite afloat. Last week's USD selloff stems from the belief that the need for safe haven assets has declined, causing participants to search for risk premium. This week, risk appetite will be left in the hands of US bank earnings (JPMorgan, Citibank, GS and BofA) and rhetoric from central banks officials. Market will be intensely listening for any signal that officials are looking to reigning risk correlated trades and limit USD selling. Comments from the Fed continued uninterrupted over the weekend. Former Vice-Chairman Kohn held his normal hawkish note, and highlighted the importance of anchoring inflation expectations, while he rejected the theory that central banks should stay accommodating longer when emerging from a recession. In Singapore, the MAS announced that it would maintain its current neutral policy stance and zero-appreciation path. There will be no shift in the width of the policy band and current center. Officials stated that the MAS will continue to watch over macro developments, including the risk of stronger global inflationary pressures. With a light economic calendar today, investors will look ahead to this week's BoJ policy decision. No change in the base rate is universally expected; instead the markets focus will be on comments regarding the JPY relative strength. The minutes from FOMC September meeting are due on Wednesday and will also capture the markets' attention. These will be closely watched, as markets seek transparency on the Fed's current standing on exit strategies. ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.