Market Snapshot – Markets in Consolidation Mode
Dollar and Euro Battle it Out
The markets have been relatively quiet over the last 24 hours as the market digests the events over the week that is about to complete. The biggest news of the week was the FOMC where the Fed kept the door open for the next rate hike in December and this is as hawkish as the Fed could get. This led to a brief rally in the dollar but that has since fizzled out and now we are seeing some consolidation in the dollar based pairs. We also saw Draghi saying that though things have improved in the Eurozone, the inflation numbers are still not in the region that would make the ECB comfortable enough to start seriously thinking about tapering just yet. This has also set the euro on the backfoot for the short term though it continues to consolidate and trade within a tight range over the last 24 hours.
Stock Markets Choppy and Concerned
The equity markets have been a bit choppy during the same time period as the concerns over North Korea continue to create uncertainty. There have been reports that North Korea might blow up a hydrogen bomb in the region and if that indeed happens, then it could lead to large scale selling in the stock markets. Also, we have elections in Germany and New Zealand over the weekend which would also generate a lot of turbulence and volatility in the markets in the coming week. No wonder that many traders have started taking profits heading into the weekend.