FX Daily: Pressure cooker

FX Daily: Pressure cooker

(MENAFN- ING)Higher US rates, a stronger dollar, EM local currency weakness and higher inflation are causing a vicious cycle for some in emerging markets - especially in Turkey. Let's see whether the Central Bank of Turkey follows through with rate cuts today. Also, look out for a rate decision in South Africa where a 25bp rate hike is far from guaranteed The dollar is holding onto recent gains, although as we noted yesterday, we think some consolidation could be due since DXY tested and stalled at some big resistance at 96. 00/9610 mid-week. The main focus in FX markets today will be rate meetings and central bank actions in the likes of Turkey, South Africa and Hungary (please see below). And there is also a focus on whether Washington is trying to coordinate a release of strategic oil reserves with China, Japan and a few other Asian nations. Our commodities team feels that such a release might be enough to turn the tide in oil markets ahead of a structural shift to a supply surplus early next year. European gas prices remain high, however. There are a few Fed speakers today and we'll also see whether US jobless claims continue