Greece, Yellen & Draghi Keep Forex Traders On Edge

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Greece, Yellen & Draghi Keep Forex Traders On Edge

Greece, Yellen & Draghi Keep Forex Traders On Edge

With a new week beginning the month of February is slowly coming to an end as traders hope that the Greece situation will go away quietly. It looks like the Eurozone will remain together as traders look forward to the kickoff of the ECB stimulus program. At the end of last week a four-month “bridging arrangement” was agreed in Greek debt negotiations. The Greek government must submit a list of economic measures it intends to carry out under the four-month extension and its EU partners must agree that they are adequate enough. This meeting will be the main focus of the markets today. The euro is flat in the morning a trading at 1.1384 as the US dollar gained a few points. Market focus will move to Janet Yellen’s testimony before US lawmakers on Tuesday. This event could cause a good deal of volatility in the markets depending on the attitude and outlook of the Bank decision maker.  The US dollar is trading at 94.44. Yellen’s comments on monetary policy and the state of the US economy follow the release of January’s policymaker meeting minutes which showed that the majority of the Fed’s open market committee’s members are in no rush to increase rates. Most investors continue to position for higher US rates at some point this year.

In the Asian session on Monday trading remains light with China on holiday for another two day. The Japanese yen is trading a bit stronger after the release of the Bank of Japan monetary policy minutes.  Bank of Japan Governor Haruhiko Kuroda said on Monday that falls in crude oil prices will help accelerate consumer inflation in the long run by boosting economic activity. “There’s no change to our goal of hitting 2 percent inflation at the earliest date possible, with a time frame of around two years,” Kuroda told parliament. Kuroda made the remarks to an opposition lawmaker, who urged him to admit the BOJ has failed to meet its pledge of achieving its 2 percent inflation target within two years as slumping oil prices push price growth further away from the target. The Japanese yen is trading at 118.95 against the US dollar and against the euro at 135.41

EURUSD(60 minutes)20150223062210

The Australian dollar is steady at 0.7835 as the kiwi dollar falls 7 points to trade at 0.7520. The US dollar has been the overall controlling factor against the Tasmanian currencies, although kiwi traders are waiting for news about dairy prices as Fonterra is expected to revise its 2015 price expectations.

The calendar is very light today but new events will keep traders busy. The Federal Reserve is expected to affirm interest rates are set to rise in the US on Tuesday, while Mario Draghi will make a public address concerning the Greek situation as well as its upcoming stimulus program.  On Wednesday Chinese traders return to the markets, Draghi will also speak again on Wednesday.

NZDUSD(60 minutes)20150223062232 AUDUSD(60 minutes)20150223062217

Gary Beal