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.

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
EUR/USD
Bullish
Oil - US Crude
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
Wall Street
Bullish
Gold
Mixed
GBP/USD
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
USD/JPY
Bearish
More View more
Real Time News
  • The ASX 200 and AUD/JPY are at risk of losses as cases of Covid-19 continue to climb in Victoria, Australia’s second-most populous state. Get your #ASX market update from @DanielGMoss here: https://t.co/O0LNvhy4eY https://t.co/ayYcdG3Yzg
  • All things considered, the #USD has held its ground relatively well against #ASEAN FX despite the recent surge in the MSCI #EmergingMarkets index As the latter set higher highs, my ASEAN-based USD index did not set lower lows Stay tuned for my next tech update! https://t.co/NeRXmsWA5M
  • 🇯🇵 Machinery Orders YoY (MAY) Actual: -16.3 Expected: -17.1% Previous: -17.7% https://www.dailyfx.com/economic-calendar#2020-07-08
  • 🇯🇵 Foreign Bond Investment (04/JUL) Actual: ¥-522.8B Previous: ¥196.2B https://www.dailyfx.com/economic-calendar#2020-07-08
  • Heads Up:🇯🇵 Machinery Orders YoY (MAY) due at 23:50 GMT (15min) Expected: -17.1% Previous: -17.7% https://www.dailyfx.com/economic-calendar#2020-07-08
  • Heads Up:🇯🇵 Foreign Bond Investment (04/JUL) due at 23:50 GMT (15min) Previous: ¥174.6B https://www.dailyfx.com/economic-calendar#2020-07-08
  • The Dow Jones could fall based on positioning signals, will the growth-linked Australian Dollar and Canadian Dollar follow? If so, what are the technical barriers ahead? Find out from @ddubrovskyFX here:https://t.co/yJrlR5C00P https://t.co/oR1TuteaqH
  • #AUD Braces for China CPI Amid Strained Sino-Australian Relations - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/07/08/AUD-Braces-for-China-CPI-Amid-Strained-Sino-Australian-Relations.html
  • The Canadian Dollar has held onto gains that have developed since financial markets crashing out in March, and may now be poised to build on said gains. Get your $USDCAD market update from @CVecchioFX here: https://t.co/7TEDki01d9 https://t.co/DkCllzw9JG
  • Texas virus cases increase 4.7% vs prior 4% 7-day average - BBG
USD in Yellen's Good Graces - Rate Hike in 2015 Still Eyed

USD in Yellen's Good Graces - Rate Hike in 2015 Still Eyed

2015-09-25 11:16:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- Fed Chair Yellen outlines plan to raise rates in 2015.

- US Dollar broadly supported, including USDJPY.

- See the September forex seasonality report.

A quiet end to a quiet week on the economic calendar has left markets sensitive to commentary from central bank officials, and price action overnight didn't disappoint in that regard. With Federal Reserve Chair Janet Yellen outlining the case for a rate hike this year in a speech last night, both risk assets and the US Dollar have found support anew.

The most interesting price action has been in US equity market futures, where (at the time of writing) the Dow Jones was up over +200-points pre-market and the S&P500 had gained nearly +1.50% itself. It's unusual to see risk assets rally on the back of what was relatively hawkish monetary policy commentary from Fed Chair Yellen; generally speaking, risk assets benefit when monetary policy becomes looser.

However, given the context of recent market moves, the price developments we've seen overnight actually make perfect sense when we think back a week:

- Global equity markets, including those in the United States, have been undergoing a spell of volatility on the back of concerns over global growth and Chinese financial concerns.

- The FOMC had held rates in part due to the aforementioned issues, thereby validating market participants' collective belief that there was a reason to be concerned.

And now:

- Fed Chair Yellen indicates that a rate hike in 2015 is still the base case, suggesting that the FOMC's concerns over global growth and Chinese financial issues are short-term in nature.

- Global equity markets are turning higher as a result of traders interpreting Fed Chair Yellen's commentary as a reason to be more optimistic on growth prospects, something the Fed was quite dour on just last week.

The key pair to watch among all this reshuffling is USDJPY. As we outlined earlier this week, USDJPY price action has set itself apart from other USD-pairs. With the S&P500 rebounding so sharply overnight, USDJPY finds itself pressing the topside of its recent triangular consolidation. Ultimately, a break through ¥121.00 and ¥121.73 will be necessary before we can more confidently say a near-term bottom has been established.

See the above video for technical considerations in EURUSD, USDCAD, AUDUSD, AUDNZD, GBPNZD, and the USDOLLAR Index.

Read more: A Good Omen for the Greenback: USD/CAD Breaking Out Higher

--- 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.