In the short term, we can expect the markets to remain quite mixed and volatile as the news regarding the plane crash starts to surface. The ‘risk off’ mentality is likely to continue until the situation resolves itself and the market is aware of the potential knock on consequences. So trade with caution, especially when trading the safe havens such as JPY, and Gold. Their movements could be quite sudden and unpredictable in the short term.
Looking at the larger picture, and that of the USD, FED chair Yellen’s speech this week was mixed with no clear bias either way. Understandably she is keeping her cards close to her chest regarding interest rate hikes. It was interesting to note that she placed a great deal of importance on the quality of jobs (low paid) so watching the next couple of NFP announcements will be interesting. If they continue to outperform, along with the average earnings index improving, we can expect the USD to strengthen in expectation of the FED providing stronger hints on when the first rate hike will come.