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
  • 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/rJznrXkcYz https://t.co/UgYlEILK5n
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/BXp2z6E0Kl
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/xGuTYZqYwh
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/EvRHfRQLgk
  • The Australian Dollar remains vulnerable in the week ahead, eyeing risks such as a dovish RBA, surging Covid cases and recent crackdowns by Beijing. Might US NFPs offer some relief to AUD/USD? Get your weekly AUD forecast from @ddubrovskyFX here: https://t.co/LQzQymM3ND https://t.co/XOCJl3vbu1
  • $AUDNZD closed at its lowest since December 2020 Prices pierced the 1.0541 - 1.0564 support zone, exposing the November low at 1.0418 A confirmatory downside close under support next week may open the door to further losses #AUD #RBA https://t.co/mybbgPHNX4
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/k49UosZOUR
  • The US Dollar seems to be losing its momentum against ASEAN currencies as of late. Could this be another top in USD/SGD, USD/THB, USD/PHP and USD/IDR? Find out from @ddubrovskyFX here:https://t.co/rVBKBuhhAb https://t.co/lTT6oelIEc
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/JTw3w7KYXP
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: 0.10% 🇪🇺EUR: -0.15% 🇯🇵JPY: -0.18% 🇬🇧GBP: -0.39% 🇳🇿NZD: -0.56% 🇦🇺AUD: -0.69% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/a8XYJHybtN
US Dollar Up vs Euro, Pound After Fed Minutes; USD/JPY Nears ¥94

US Dollar Up vs Euro, Pound After Fed Minutes; USD/JPY Nears ¥94

Christopher Vecchio, CFA, Senior Strategist

THE TAKEAWAY: USD FOMC January meeting Minutes > Size of QE May Need to Vary as Economy Improves > USDOLLAR BULLISH

The Federal Reserve’s policymaking board has been a difficult flock to read; the December meeting Minutes showed that FOMC voters were concerned about the scope of QE3, even though it was increased at the very same meeting. This paradoxical policy up until this point has been viewed as bullish for the US economy. After all, the Fed wouldn’t threaten draining liquidity from the market unless conditions were improving. Today, the Fed’s stance became a bit clearer.

The January meeting Minutes laid out the most hawkish set of Minutes to date, with "a number of participants stated that an ongoing evaluation of the efficacy, costs and risks of asset purchases might well lead the Committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labor market had occurred." Essentially, the Fed is worried about excessive risk taking in financial markets – that excess liquidity has started to create the threat of systemic risk if the Fed doesn’t wind down its stimulus efforts sooner than later.

The Minutes also said that “[A] number of participants discussed the possibility of providing monetary accommodation by holding securities for a longer period than envisioned in the Committee's exit principles, either as a supplement to, or a replacement for, asset purchases.”

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) 5-minute Chart: February 20, 2013

US_Dollar_Rallies_Against_Euro_Pound_After_Fed_Minutes_USDJPY_Nears_94_body_Picture_1.png, US Dollar Up vs Euro, Pound After Fed Minutes; USD/JPY Nears ¥94

Charts Created using Marketscope – Prepared by Christopher Vecchio

In sum, these are hawkish chirps from the Fed, which have proved bullish for the US Dollar. The world’s reserve currency has surged across the board, most notably against the British Pound and the Euro. The GBPUSD has fallen towards 1.5200 on the news, while the EURUSD traded below 1.3300. The other components of the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR), the Australian Dollar and the Japanese Yen, followed suit: the AUDUSD slipped towards 1.0250; and the USDJPY continued its climb towards 94.00.

The aggregate effect of these moves has pushed the USDOLLAR to fresh 2013 highs, testing above 10400 for the first time since September 2010.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

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

DISCLOSURES