The event dollar traders – and really investors in all asset classes – have long waited for is finally upon us. Speculation surrounding the FOMC’s Taper decision has run rampant, spurring expectations and fear of an explosive reaction to a big shift in the market’s support structure.
The Euro broke to fresh multi-week highs against the US Dollar, but the Dow Jones FXCM Dollar Index (ticker: USDOLLAR) continues to hold key multi-month lows. All eyes now turn a highly-anticipated US Federal Reserve policy announcement to drive FX moves.
The Japanese Yen had a rough week, and with Syrian tensions easing amid talk of higher taxes at home, it may have rocky roads ahead. But the Fed’s ever-important September policy meeting with hold the Yen’s ultimate fate this week.
Gold price losses mark the largest single week decline since June and come ahead of next week’s highly anticipated FOMC policy meeting. Bullion remains at risk after breaking below key technical support.
The Bank of England (BoE) interest rate decision may help the sterling to preserve the bullish trend dating back to July should the central bank highlight an improved outlook for the U.K. economy.
The Aussie dollar is taking advnatage of an improved news flow out of China and an end to the RBA's rate cut regime. However, macro-level forces come into focus as all eyes turn to the Federal Reserve as the policy-setting FOMC committee convenes for its monthly meeting.
Written by the DailyFX Research Team. To sign up for a weekly e-mail with our currency outlooks, go to our page for forex news delivered to your inbox.
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