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
Wall Street
Bullish
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
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/7Yd5Tzua0d
  • Do you know the difference between investing and trading? Because while the goal might seem the same, they're very different things . Learn more here.https://t.co/fG6fNEPj9q https://t.co/A0W3CA5EWh
  • The Canadian Dollar remains supported amid elevated crude oil prices. Don’t be surprised if the Bank of Canada disappoints aggressive hawkish expectations. Earnings season is a wildcard. Get your weekly Loonie forecast from @ddubrovskyFX here: https://t.co/iyb5OmW2S4 https://t.co/Oh35VUg9Gr
  • Rather than focusing on earning a specific number of pips per day, traders need to focus on what can be controlled. In trading terms this relates to following a strategy perfectly, with no emotion or hesitation. Learn more here: https://t.co/6ZH026QLRN https://t.co/jQ9HH9KuWy
  • Slippage can be a common occurrence in forex trading but is often misunderstood. Understanding how forex slippage occurs can enable a trader to minimize negative slippage, while potentially maximizing positive slippage. Learn about FX slippage here: https://t.co/Blrl0uF2Ct https://t.co/VXiNCuR3bF
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here: https://t.co/DWm7cBMUg9 https://t.co/9SC4I69oi7
  • The European Central Bank will consider it a job well done if there is no movement in EUR/USD or the Euro crosses before, during or after Thursday’s policy announcements by its Governing Council. Get your weekly Euro forecast from @MartinSEssex here: https://t.co/TCTonpE9Ik https://t.co/qq6TTaPtLE
  • Further your forex knowledge and gain insights from our expert analysts @ddubrovskyFX and @FxWestwater on JPY with our free Q4 market analysis guide, available for free today.https://t.co/mzeJ5x73N3 https://t.co/zll2sxL4ja
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/Js6SNdNj9y
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/kIIBffEMi7 https://t.co/MqFQ9uS26R
Trade Setups and Preview for Today's FOMC Meeting

Trade Setups and Preview for Today's FOMC Meeting

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- High yielding and emerging market currencies in focus today.

- Base case is for no rate hike, lower rate guidance.

- See the September forex seasonality report.

Market participants have more or less priced out the possibility of a September rate hike, with the Fed funds futures contract implied probability showing a 34% chance of a rate hike today.

The Fed (realistically) has one of two options today, and neither bode well for the US Dollar.

The first option would be for the Fed to raise rates, and announce that it would not do so again until its inflation half of the dual mandate is met. In this case, with a rate hike on the table, the USD could gain ground against the commodity currencies, but with equity market weakness also on the table, it could mean that the EUR and JPY are the big winners.

The other option would be for the Fed to not raise rates at this meeting, and at the moment, markets are pricing in December as the most likely period for the first rate rise (per the Fed funds futures contract). In this case, no rate hike could translate into renewed demand for riskier assets in the short-term, with equity markets rallying and AUD, CAD, and NZD picking up some more of their recently lost ground.

Seemingly no matter what the Fed does today, the real threat to the US Dollar comes from reduced expectations for future policy action. While the FOMC's projections will likely show improved forecasts for growth and the labor market and a weaker outlook for inflation, the Fed’s "dot plot," in which Fed members indicate where they believe the main rate will be at various points in time, will be front and center.

At the June meeting, the 2015 and 2016 rate forecasts were revised lower to 0.57% and 1.75% respectively, from 0.77% and 2.03%, respectively, in March. The June forecasts implied one or two rate hikes in 2015; the decision to do a “one and done” hike or delay it to the October or December meetings will further lower the projected rate path. As we saw after the last major policy meeting in June, reduced rate expectations (vis-a-vis the dot plot) have hurt the US Dollar.

Read more: One Last Data Hurdle to Clear for USD Pre-FOMC

--- 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