We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • Hey, traders 👋 do you want live AMAS with our analysts, market updates and tools to improve your trading strategy? Join us now on Instagram! 👉 https://t.co/pHGzVMqsC4 https://t.co/Gqd6QYtwau
  • Excellent quote, and very true. https://t.co/ZZxfYkhtUM
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.55%, while traders in Germany 30 are at opposite extremes with 78.28%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/mF9IjVDANC
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.19% 🇨🇭CHF: 0.05% 🇪🇺EUR: 0.03% 🇬🇧GBP: -0.10% 🇦🇺AUD: -0.31% 🇳🇿NZD: -0.49% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/B5s24o9414
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.98% US 500: -1.04% France 40: -1.20% Germany 30: -1.24% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/smh3lrHlFA
  • AUD/USD Technical Analysis: Aussie Dollar Drop Ends Rebound - https://www.dailyfx.com/forex/technical/home/analysis/aud-usd/2020/01/27/AUDUSD-Technical-Analysis-Aussie-Dollar-Drop-Ends-Rebound.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #AUDUSD #technicalanalysis https://t.co/NFK3zlXtVX
  • The exponential moving average (EMA) is a derivative of the simple moving average (SMA) indicator. Compared to the SMA, the EMA weighs recent price changes more heavily than later changes in price. Learn how to incorporate the EMA into your strategy here: https://t.co/w48c0y1yKv https://t.co/3mZ290WMCJ
  • The US Dollar may rise with $USDIDR, $USDSGD, $USDPHP and USD$MYR as #coronavirus contagion fears hurt emerging markets. The #Fed and its repo operations will be closely watched #ASEAN - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/01/27/USD-May-Rise-as-IDR-SGD-and-PHP-Fall-on-Coronavirus-Fears-and-Fed.html?CHID=9&QPID=917702 https://t.co/xMxoEifAIU
  • Commodities Update: As of 03:00, these are your best and worst performers based on the London trading schedule: Silver: 0.61% Gold: 0.52% Oil - US Crude: -2.46% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/EaP6sqAf6A
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.25% 🇪🇺EUR: 0.05% 🇨🇭CHF: 0.04% 🇬🇧GBP: -0.11% 🇦🇺AUD: -0.29% 🇳🇿NZD: -0.53% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/J28cZ72K8a
FOREX TREND MONITOR: US Dollar's Fate at Stake as Fed Ends QE2

FOREX TREND MONITOR: US Dollar's Fate at Stake as Fed Ends QE2

2011-06-06 11:40:00
Ilya Spivak, Sr. Currency Strategist
Share:

Major Currencies vs. US Dollar (% change)

30 May 201102 Jun 2011

FOREX_TREND_MONITOR_US_Dollar_Fate_at_Stake_as_Fed_Ends_QE2_body_Picture_3.png, FOREX TREND MONITOR: US Dollar's Fate at Stake as Fed Ends QE2

EUR/USD: Euro’s Focus Turns to ECB Interest Rate Decision

The Euro’s correlation with the S&P 500 remains its most potent relationship, but the strength of the link has waned to reflect the fading importance of the Euro Zone debt crisis for overall investors’ overall sentiment (for which the S&P is a proxy) as well as a shifting of the spotlight onto domestic issues for the single currency. Indeed, with further aid to Greece looking increasingly certain and a weekend election in Portugal producing a strong majority government committed to implementing the budget cuts required to get an EU/IMF lifeline, the single currency has found some home-grown support while broader-based risk aversion has centered on increasingly sour economic data out of the US. The inward focus turns the markets’ attention to the European Central Bank interest rate decision. While the bank is not expected to hike rates this time around, traders will be on the lookout for clues about the timing of the next increase, with any mention of “strong vigilance” vis-à-vis to be interpreted as signaling renewed tightening as soon as July. German Factory Orders and Industrial Production figures round out the economic calendar.

FOREX_TREND_MONITOR_US_Dollar_Fate_at_Stake_as_Fed_Ends_QE2_body_Picture_4.png, FOREX TREND MONITOR: US Dollar's Fate at Stake as Fed Ends QE2

Source: Bloomberg

GBP/USD: Bank of England Rate Decision Likely Non-Event

Monetary policy expectations have re-entered the spotlight for the British Pound with the Bank of England due to deliver its monthly interest rate decision. With the possibility of a change in the existing posture virtually nil however, the announcement seems likely to pass with few fireworks, with traders having to wait two weeks for the release of minutes from the sit-down to gauge the new voting pattern on the rate-setting MPC committee now that its top hawk Andrew Sentence has been replaced. Broadly speaking, this seems likely to put Sterling on the defensive against currencies where tightening expectations are robust while giving it a lift against those where the central bank seems more sluggish than Mervyn King and company. In the case of the greenback, much will depend on the rhetoric from Fed officials (Dudley, Plosser, Bernanke) as they give guidance on how the US central bank will reconcile seemingly slowing US growth with the end of the QE2 stimulus program this week. Industrial Production and Producer Price Index figures are also on tap.

FOREX_TREND_MONITOR_US_Dollar_Fate_at_Stake_as_Fed_Ends_QE2_body_Picture_5.png, FOREX TREND MONITOR: US Dollar's Fate at Stake as Fed Ends QE2

Source: Bloomberg

USD/JPY: US Bond Yields Still Key, All Eyes on QE2 Expiry

US Treasury bond yields continue to dominate as the leading driver of USDJPY price action, putting the end of QE2 squarely in focus as the Fed completes its final purchase of government debt on Thursday. Intuitively, one would assume yields would rise after the central bank withdraws its intervention and allows the markets to drive direction as traders price in US fiscal stress, but the recent run of poor economic data has kept a lid on rates for now. Looking ahead, a thin US economic calendar means that much of the market-moving information will come from speeches by the Fed’s Charles Plosser, Bill Dudley and Ben Bernanke, the latter clearly dominating the spotlight. An affirmation that the end of QE2 is the beginning of a larger unwinding of stimulus despite disappointing performance in the second quarter is likely to give US yields a boost, pushing the greenback higher against the Yen.

FOREX_TREND_MONITOR_US_Dollar_Fate_at_Stake_as_Fed_Ends_QE2_body_Picture_6.png, FOREX TREND MONITOR: US Dollar's Fate at Stake as Fed Ends QE2

Source: Bloomberg

USD/CAD, AUD/USD, NZD/USD: Risk Trends in Focus, Aussie May Diverge

Broadly speaking, the commodity bloc remains anchored to stock markets, putting the focus on the end of QE2, the Fed speaking calendar, and their cumulative implications for US economic growth (long a proxy for the recovery in the world at large). One notable exception here may prove to be the Australian Dollar, where correlations with the S&P 500 have started to wane already as the RBA interest rate decision approaches ahead. Traders will watch the release closely to see if the central bank will build on the mildly hawkish rhetoric that emerged last month, perhaps even signaling another increase in July or August. No such thing is likely for the RBNZ policy announcement, and risk trends seem likely to hold sway over the Kiwi. Canada’s Ivey PMI, Housing Starts as well as Employment figures for the North American country as well as Australia round out top-tier scheduled event risk.

FOREX_TREND_MONITOR_US_Dollar_Fate_at_Stake_as_Fed_Ends_QE2_body_Picture_7.png, FOREX TREND MONITOR: US Dollar's Fate at Stake as Fed Ends QE2

Source: Bloomberg

FOREX_TREND_MONITOR_US_Dollar_Fate_at_Stake_as_Fed_Ends_QE2_body_Picture_8.png, FOREX TREND MONITOR: US Dollar's Fate at Stake as Fed Ends QE2

Source: Bloomberg

FOREX_TREND_MONITOR_US_Dollar_Fate_at_Stake_as_Fed_Ends_QE2_body_Picture_9.png, FOREX TREND MONITOR: US Dollar's Fate at Stake as Fed Ends QE2

Source: Bloomberg

For real time news and analysis, please visit http://www.dailyfx.com/real_time_news

To receive future articles by email, please contact Ilya at ispivak@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.