Focus on the Dollar
The focus continues to be on the dollar today as well as the concerns over future rate hikes from the Fed has led to the weakening of the dollar over the last few days. The FOMC minutes almost confirmed the rate hike in December but also expressed concern from the Fed members about the way the inflation in the US was progressing and whether it would be able to sustain additional rate hikes in the future. Also, with the current Fed Chief Yellen leaving and being replaced by Powell, it remains to be seen what his approach to monetary policy would be in the coming months. This has placed the dollar under some clear pressure and the euro bulls have been trying to use this weakness to push the euro higher.
Merkel and May In Strife
As if the problems for the dollar werent enough, we are seeing domestic troubles of Merkel and May beginning to impact the euro and the pound as well. They have been having to deal with political issues within their country and so far, the impact on their respective currencies have been minimal. But it remains to be seen how long this would last and how best both of them would be able to wriggle out of their troubles.