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Currency markets focus on tomorrow’s Fed meeting

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Having pushed towards 7250 during yesterday’s trading, the FTSE fell away after the bell this morning, dropping 0.2% in early trading. The Eurozone indices were the same, with both the DAX and CAC dropping by a similar amount taking back some of Monday’s growth.

Spreadex analyst, Connor Campbell noted “Tuesday’s a bit of a buffer day, with little for the markets to process beyond speculation surrounding tomorrow’s Fed meeting.” He added “The European indices’ fall can be traced back to the respective performances of the pound and the euro against the dollar”

Investors will be focusing on the Euro today ahead of the release of the ZEW Survey from the German Centre for European Economic Research. ADS Securities analyst, Konstantinos Anthis commented “The survey is expected to highlight the positive sentiment regarding the improving financial conditions in Germany and the Euro area in general and should that be the case the shared currency will receive fresh support”

Over in the US, equity markets continued their fine, recent run of form, with the Dow Jones notching its fifth consecutive record close and the S&P 500 closed at a closing high for the second day in succession. Accendo Markets analyst, Mike van Dulken noted “The Dow outperformed as Boeing once again led the index to a record close, while Financial strength ahead of Wednesday’s Fed meeting lifted the S&P higher. The Nasdaq climbed to an intraday record closing high before closing 0.1% stronger.”

The dollar had a mixed performance yesterday as the US currency gave up ground against the euro but gained against the pound, the yen and gold. Konstantinos Anthis suggested “This clearly signals that investors are positioning themselves for a bullish Fed meeting, anticipating that Janet Yellen will announce immediate plans to start reducing their balance sheet.”

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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