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
Oil - US Crude
Mixed
Wall Street
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
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • 🇺🇸 USD ADP Employment Change (MAR), Actual: -27k Expected: -150k Previous: 183k https://www.dailyfx.com/economic-calendar#2020-04-01
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.06% 🇬🇧GBP: -0.45% 🇨🇭CHF: -0.45% 🇳🇿NZD: -1.08% 🇦🇺AUD: -1.22% 🇨🇦CAD: -1.42% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/HExKGVsOCd
  • ECB's Weidmann states that he is still skeptical of Eurobonds - Die Zeit $EUR
  • 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/uoyH5osnuX
  • Heads Up:🇺🇸 USD ADP Employment Change (MAR) due at 12:15 GMT (15min), Actual: N/A Expected: -150k Previous: 183k https://www.dailyfx.com/economic-calendar#2020-04-01
  • Análisis $USDMXN: Peso Mexicano cierra el primer trimestre con pérdidas superiores al 28% #usd #mxn #trading https://t.co/cPRrecg6lf
  • Moody's forecasts China real GDP growth of 3.3% for 2020
  • 🇺🇸 USD MBA Mortgage Applications (MAR 27), Actual: 15.3% Expected: N/A Previous: -29.4% https://www.dailyfx.com/economic-calendar#2020-04-01
  • Why must financial market traders monitor both monetary and fiscal policy? Find out from @MartinSEssex here: https://t.co/Fkzk88Y5gm https://t.co/gIARIOHCxS
  • This is a new vehicle for the #Fed to make USD liquidity available across markets. As noted yesterday (https://www.dailyfx.com/forex/fundamental/article/special_report/2020/03/31/US-Dollar-May-Resume-Rise-Amid-Global-Recession-Fears.html) the market pop after the open-ended QE news looked temporary as credit conditions remained stubbornly tight https://t.co/DlbIue2Ve5
U.S. Dollar on Top Ahead of Critical FOMC Meeting

U.S. Dollar on Top Ahead of Critical FOMC Meeting

2012-01-25 14:43:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Fundamental Headlines

Economy in U.S. Preferred by Investors – Bloomberg

Obama Calls for Higher Taxes on Wealthy – Bloomberg

Fed Set to Push Back Timing of Eventual Rate Hike – Reuters

German Bunds Draw Strong Demand – WSJ

Obama Makes Populist Pitch – WSJ

European Session Summary

Price action was very choppy in the overnight, though, for the first time in what has seemed like weeks, the Asia sell-off / Europe rally trend was broken. Following Australian inflation data last night, market participants bid higher yielding currencies and risk-correlated assets higher, though the rally stagnated by the European session open. The sell-off in the first part of European trading is rooted in two causes: poor British growth figures; and a further breakdown in the Greek bondholder negotiations.

Not much needs to be said about the poor British gross domestic product reading for the fourth quarter; I have long stated that the British economy is stagflating. While inflation has eased in recent months, it remains above the two percent threshold set by the Bank of England; the labor market continues to weaken; and now growth has turned negative.

In terms of the Greek bondholder swap negotiations, it appears that both the Institution for International Finance (IIF) and Greek officials have walked away from the table. The major sticking issue appears to be whether or not the European Central Bank will participate in the haircuts being levied on private sector bondholders. It’s been established that no such event will take place. This, being the main sticking point, is creating more than a stir; the International Monetary Fund (IMF) today suggested that the ECB agrees to the haircut so that the issue is finally resolved.

Taking a look at credit markets, risk-appetite appears to have been stemmed across Europe, with German bunds approaching all-time record low yields (higher prices) while French and Italian 10-year bonds widened against their German counterpart. The Portuguese 10-year bond is under substantial pressure, with the yield moving up to 13.492 percent, as the country mulls options, including requesting another bailout, to help the economy turn around. This situation will only get worse without further intervention; and I would argue that Portugal is close to becoming the next major issue in Europe, ahead of Italy and Spain.

NZD/USD 5-min Chart: January 24 to January 25, 2012

U.S._Dollar_on_Top_Ahead_of_Critical_FOMC_Meeting_body_Picture_10.png, U.S. Dollar on Top Ahead of Critical FOMC Meeting

Charts created using Marketscope– Prepared by Christopher Vecchio

Overall, it appears that some of the typical correlations have broken free, with the commodity currencies and European currencies mixed across the board. While the New Zealand Dollar was the worst performing major against the U.S. Dollar, down 0.75 percent at the time this report was written, the Australian Dollar was down a mere 0.22 percent. Similarly, the Euro underperformed the Greenback by 0.50 percent, while the British Pound was off a slight 0.20 percent despite the country’s dismal growth reading released earlier today.

24-Hour Price Action

U.S._Dollar_on_Top_Ahead_of_Critical_FOMC_Meeting_body_Picture_1.png, U.S. Dollar on Top Ahead of Critical FOMC MeetingU.S._Dollar_on_Top_Ahead_of_Critical_FOMC_Meeting_body_Picture_7.png, U.S. Dollar on Top Ahead of Critical FOMC Meeting

Key Levels: 14:05 GMT

U.S._Dollar_on_Top_Ahead_of_Critical_FOMC_Meeting_body_Picture_4.png, U.S. Dollar on Top Ahead of Critical FOMC Meeting

Thus far, on Wednesday, the Dow Jones FXCM Dollar Index is higher, trading at 9915.71, at the time this report was written, after opening at 9884.24. The index has traded mostly higher, with the high at 9931.27 and the low at 9872.68.

--- 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, send an e-mail with subject line "Distribution List" to cvecchio@dailyfx.com.

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

DISCLOSURES

News & Analysis at your fingertips.