News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • ECB's Muller - Given the currently very favourable financing conditions and the solid recovery, I am not sure if increasing the volume of APP purchases in the Spring is the best way to avoid a cliff effect
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM73cHA https://t.co/qwLAWMpCGn
  • 🇺🇸 MBA Mortgage Applications (17/SEP) Actual: 4.9% Previous: 0.3% https://www.dailyfx.com/economic-calendar#2021-09-22
  • Heads Up:🇺🇸 MBA Mortgage Applications (17/SEP) due at 11:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-22
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrLeetw https://t.co/fs0ldanq41
  • Forex sentiment analysis can be a useful tool to help traders understand and act on price behavior. Learn how to get the most out of understanding trader sentiment here: https://t.co/rJznrX2BzZ https://t.co/Wfr6fQ9PTr
  • Of note, worth being cautious on the authenticity of this report given the source https://t.co/i9jcU0OQF4
  • Sources close to the Chinese Government have told Asia Markets a deal that will see China Evergrande (3333 HK) restructured into three seperate entities is currently being finalised by the Chinese Communist Party and could be announced within days.
  • Shadow MPC as hawkish as ever - They have been calling for the BoE to end QE early since June - Often a big difference in what people think a central bank should do and will do https://t.co/RAakSI8gI6
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqi8ZEe https://t.co/XfrcQXJu0Z
The 2 FOMC Policy Specifics to Look for

The 2 FOMC Policy Specifics to Look for

Kathy Lien, Technical Strategist

When the June FOMC meeting minutes are released on Wednesday, traders should look for signs of conviction regarding tapering, as well as indications as to which assets will be tapered.

The most important event risk for the US dollar (USD) this week will be the June Federal Open Market Committee (FOMC) meeting minutes, which will be released on Wednesday. Given the heightened sensitivity to anything that could shed light on the timing for tapering by the Federal Reserve, the minutes could have an unusually significant impact on the US dollar.

The recent surge in Treasury yields provided zero benefit to the greenback, and with yields declining on Tuesday ahead of the FOMC minutes, the dollar retreated against the euro (EUR), British pound (GBP), and Japanese yen (JPY).

In all likelihood, the FOMC minutes may not provide much clarity regarding upcoming Fed policy, but with the next meeting only a month away, investors will be going over the report with a fine-tooth comb for any fresh insight into the Fed's plans.

In terms of how the dollar could react, the market expects the Fed to begin tapering this year, with a small majority anticipating a move in September as opposed to December. Even for those who favor earlier tapering, the size and scope by which bond purchases will be reduced remains an open question. Of course, we don't expect these FOMC minutes to have all of those answers, if any at all.

Nonetheless, we and the broader financial community will be looking for two specific details in tomorrow's release:

The first is the level of conviction for easing in September. Most Fed Presidents support some type of action over the next three months, with more leaning towards a move sooner as opposed to later.

If the minutes emphasize the progress made in the US economy and the need to act quickly, the dollar could resume its rise as yields extend higher. However, if the minutes contain an overall air of caution and a bias towards waiting for further improvements before changes are made, the dollar could fall sharply as US yields give up recent gains.

Secondly, we will be looking for details about which assets the Fed will taper. The choice is between Treasuries and mortgage-backed securities, and if the Fed opts for only Treasuries, the dollar should slide, as this would represent a smaller initial move.

If the minutes reveal plans to taper purchases of both assets, it would be positive for the dollar because it gives hope for a more aggressive reduction.

In terms of how much the Fed will taper, this will be a decision made in September, but the central bank could drop some hints in the FOMC minutes about a preferred range.

By Kathy Lien of BK Asset Management

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

DISCLOSURES