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
Bearish
Oil - US Crude
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
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
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
More View more
Real Time News
  • Are recent gains in the Indian Rupee and Nifty 50 warranted? Risks are brewing in the background, leaving USD/INR in a consolidative setting as the Nifty pressures resistance. Get your $USDINR market update from @ddubrovskyFX here:https://t.co/svDaSdprvN https://t.co/dkQtNiE1fs
  • Seasonal factors, oversupply issues and the outbreak of COVID-19 has seen the price of liquefied #naturalgas (LNG) fall to 22-year lows (1.519), with the situation exacerbated by ‘fuller-than-normal’ storage facilities. Get your market update here:https://t.co/VOqfkBQ4aR https://t.co/hiWxPVFdMv
  • S&P 500 bulls in command, #Nasdaq 100 produces “V” shaped recovery, while #FTSE 100 extends . Get your #equities market update from @daniele recovery https://t.co/mbWlBUItWv https://t.co/N64fXcj97Y
  • Crude #oil prices await the #OPEC+ meeting where record output cuts could be prolonged as demand for energy from the US and China continues recovering. What could be the downside risks? https://t.co/M8BORPx4sH https://t.co/3kHHeibDb9
  • The risk rally continued in a big way this week and #Euro bulls have remained in-charge against the US Dollar and Japanese #Yen. Get your market update from @JStanleyFX here: https://t.co/o7vPmczvMJ https://t.co/GX2YTXz83u
  • The price of #gold may continue to exhibit a bullish behavior in June as the pullback from the yearly high ($1765) reverses ahead of the May low ($1670). Get your Gold market update from @DavidJSong here: https://t.co/OeaYtCpcIo https://t.co/UQVPIVCTCP
  • The $USD breakdown has taken the index into confluence support at the objective yearly open. Get your USD technical analysis from @MBForex here: https://t.co/A16XEv6n4d https://t.co/GzEp3gCAe5
  • US equities continue to run higher with the Nasdaq 100 setting a fresh all-time-high, not even three months after giving back almost a third of its value in about a month. Get your #Nasdaq technical analysis from @JStanleyFX here: https://t.co/1LI54uvI8x https://t.co/e9FvSLqfaA
  • The US Dollar may be at risk to losses against some of its #ASEAN counterparts. USD/SGD, USD/PHP, USD/MYR and USD/IDR have recently broken to the downside. Will losses continue? Find out from @ddubrovskyFX here: https://t.co/0RTlj6maTT https://t.co/UyQ4i0AihI
  • The British Pound technical outlook still seems to favor the downside. GBP/CAD may pressure key rising support from August as GBP/AUD could prolong its downtrend. GBP/CHF may fall. Get your $GBP market update from @ddubrovskyFX here: https://t.co/hBOpDKXmfW https://t.co/AJlT2YKeCu
Yellen's Dovish Wrinkle Boosts Carry Trade - Why No EUR/USD Rally?

Yellen's Dovish Wrinkle Boosts Carry Trade - Why No EUR/USD Rally?

2015-02-26 12:08:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- US data at worst stretch point since Sep'12; why no EURUSD rally?

- Lower rates for a few months stokes demand for carry trade.

- See the DailyFX Economic Calendar for Thursday, February 26, 2015.

Fed Chair Yellen may have been upbeat about recent economic progress in the United States but she undoubtedly added another wrinkle of dovishness to the equation. For weeks, market participants have honed their focus around the wording "patient" in the Fed's policy statement, drawing on a lesson from the past: ahead of the Fed's June 2004 rate hike, the word "patient" was deployed to describe the Fed's stance for raising rates in the prior two meetings.

Accordingly, when Fed Chair Yellen announced in the semi-annual Humphrey-Hawkins testimony that forward guidance could be adjusted after the word "patient" was removed from the policy statement, it essentially meant that the two- to three-meeting cushion provided by the wording was an invalid interpretation. As such, even though policymakers may have hoped to raise rates as early as June, it seems like the market is priming itself for a September liftoff at the earliest.

While the perceived dovishness is helping boost carry trades/higher yielding FX, it's curious that EURUSD isn't rallying on the developments. The key $1.1260-1.1460 range remains in place, even as Euro-Zone economic data (as measured by CESIEUR) and US economic data (as measured by CESIUSD) diverge to their widest differential since September 2012. Even though Greece is off the front page, it doesn't seem the implications of the recent negotiations have exited traders' minds.

See the above video for technical considerations in EURUSD, AUDUSD, EURGBP, and USDOLLAR.

Read more: Central Bank Commentary to Provide Spark for USD, GBP, CAD

--- Written by Christopher Vecchio, Currency Strategist

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

News & Analysis at your fingertips.