Weekend comments from Fed Vice-Chair Stanley Fischer were largely ignored but his optimism on growth and concern about low inflation bears closer scrutiny. The trading week begins with mild US dollar strength. CFTC positioning showed fewer euro shorts and CAD traders caught wrong-footed. After stronger than expected US core CPI figures on Friday and headline-gabbing remarks from Greece interior minister indicating his country has ran out of money, EURUSD was stopped out and GBPUSD remains in progress.
The week begins with a holiday and the United States, Hong Kong, South Korea and parts of Europe so trading will be thin. The long weekend may have let Fischer slip some important comments in under the radar at a central banking conference in Portugal.
“It's sort of ironic that at the present we have an output target and we have an inflation target, which are supposed to be conflicting, but we're more or less there on the output target,” he said. “We are not there on the inflation target, so that we have to put in a lot more steam.”