Over the last week the U.S. dollar has declined slightly and the Euro FX has firmed. The major story in the forex markets has been the 300 point drop in the British pound over the last three sessions. The main factor in the pound weakness was the dismal performance of the Tories under PM May in the June 8 election. The Conservatives only have a four person majority over Labour in parliament after the election. This will weaken May as she begins negotiations with the EU on the terms of Britain’s exit from the union.
In the last week gold has dropped 30 dollars from its recent rally high. U.S. stock indices remain near record highs with the exception of the Nasdaq index. The Nasdaq has dropped nearly two hundred points in the last two sessions as investors have taken stock of the uninterrupted rally of the largest tech stocks and have decided to book some of their outsized gains.
On Wednesday the Federal Reserve will end their monthly meeting. It is a nearly unanimous consensus by traders that the Fed will increase short term interest rates at this meeting.