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.

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
EUR/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
Oil - US Crude
Mixed
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
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • 6 out of 9 Dow Jones sectors ended higher, with 73.3% of the index’s constituents closing in the green. healthcare (+2.39%), information technology (+1.54%) and consumer discretionary (+0.75%) were among the best performers, while energy (-0.82%) lagged behind.
  • 🇳🇿 Business NZ PMI (MAR) Actual: 63.6 Previous: 53.4 https://www.dailyfx.com/economic-calendar#2021-04-15
  • The US Dollar may extend gains against the Thai Baht. But, its price action within USD/SGD, USD/PHP and USD/IDR seem to be favoring more range-bound trading conditions. Get your market update from @ddubrovskyFX here:https://t.co/DYCLXAFcCr https://t.co/ObnecL3R6u
  • Heads Up:🇳🇿 Business NZ PMI (MAR) due at 22:30 GMT (15min) Previous: 53.4 https://www.dailyfx.com/economic-calendar#2021-04-15
  • For markets, data really only matters to the extent it drives monetary policy bets Did US retail sales absolutely crush estimates? YES Guess what? Odds of a #Fed rate hike by end of 2022 worsened, now about 54% chance vs 90% early April Dovish #Fed comments doing the real work https://t.co/8phPSG9DMe
  • CDC panel tentatively set to meet late next week on Johnson & Johnson vaccine $JNJ $SPX $NDX $RUT $DJI
  • Fed's Mester: - Does not think the Fed being behind the curve is a primary risk - Second half of the year is going to be strong - Growth will be at 6% or higher overall this year
  • Following their rebound from critical trend support at the end of March, gold prices have now broken through multi-week consolidation resistance. Get your $XUUSD market update from @CVecchioFX here:https://t.co/uZtcPEukJ1 https://t.co/qu0PLXwjwJ
  • Silver hit a fresh three-week high above the 25.80 level. The metal had hit its lowest point since December at the end of March, around the 24.00 level. Get your $XAG market update here:https://t.co/hN2TNhCsio https://t.co/z8EqgtQHyX
  • Fed's Mester: - We are going to see inflation stabilize - It may take several months for supply chains to get fixed
US Dollar Hits Reset on Fed Rate Expectations Post-GDP

US Dollar Hits Reset on Fed Rate Expectations Post-GDP

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- Fed rate expectations slip back after dismal Q2'16 US GDP reading.

- USDOLLAR Index pacing for worst day since before Brexit.

-See the DailyFX Economic Calendar for next week’s US data.

In the days ahead of Friday's Q2'16 US GDP report, there was as high as a 65% chance of a rate hike by June 2017, according to the Fed funds futures contract, rising from an implied first-month hike in January 2018 at the start of July. The collapse in rate expectations post-GDP has proven to be a major burden for the US Dollar.

The dissonance between what the Fed said it might do - raise rates one to two times this year if US data continues to improve - and what markets are expecting - now, no confidence in a hike until at least January 2018 - is the greenback's albatross. The stark reality for Fed policymakers is that the US economy (+1.2% annualized) is growing slower than the Euro-Zone economy (+1.6% annualized). Against this backdrop, it seems highly unlikely the Fed would be in a hurry to raise rates.

Table 1: Probability of Rate Hikes across Upcoming Fed Meetings

Please add a description for the image.

Markets don't see any period before the end of 2017 as eclipsing the 60% threshold. The GDP report knocked at least six months off hiking expectations. Correlation is not causation, but the Fed has not raised rates unless market participants have priced in at least a 60% chance in the front month of them doing so. Accordingly, if US economic data remains surprisingly weak, then Fed officials will have no choice but to backtrack on their recent optimistic tone - something that could only hurt the US Dollar further..

Read more: EUR/USD Prospects Turnaround Over Span of a Week after GDP Surprises

--- 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