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
EUR/USD
Mixed
Oil - US Crude
Bearish
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
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in EUR/CHF are long at 74.18%, while traders in France 40 are at opposite extremes with 77.53%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/TQG0SzZVUh
  • Heads Up:🇮🇹 Inflation Rate YoY Final (MAY) due at 08:00 GMT (15min) Expected: 1.3% Previous: 1.1% https://www.dailyfx.com/economic-calendar#2021-06-15
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9Flsqcxo9 https://t.co/QBK90rlQGy
  • Commodities Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.45% Gold: 0.09% Silver: -0.45% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/4OdjSck2KZ
  • BofA June Fund Manager survey - Long commodities overtakes bitcoin as most crowded trade - 63% believe Fed will signal tapering in Aug/Sep - 72% of fund managers say inflation is transitory
  • RT @C_Barraud: 🇺🇸 My proxies and credit card data (https://t.co/tg140Kt5JI) also suggest that retail sales for May could surprise downward.…
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.17% 🇨🇭CHF: 0.15% 🇳🇿NZD: 0.14% 🇯🇵JPY: 0.04% 🇬🇧GBP: 0.01% 🇦🇺AUD: -0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/TXvUbFG4VJ
  • Airbus shares open up 1% higher https://t.co/RTWItu0GeU
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.41% France 40: 0.38% FTSE 100: 0.26% US 500: 0.22% Wall Street: 0.19% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/RQYIRcAY74
  • EU and US reach a deal to resolve Boeing-Airbus trade dispute
Fed Rate Hike Odds Steady but LT Challenges Remain for USD

Fed Rate Hike Odds Steady but LT Challenges Remain for USD

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- Fed minutes indicate a 'twist' in Fed thinking: raise rates sooner rather than later; then don't hike again for a while thereafter.

- Market will have to weigh ST hawkish versus increasing MT dovishness.

- See the DailyFX economic calendar for Wednesday, October 12.

The September FOMC minutes came and went yesterday with a bit of volatility and a plethora of interpretations - a quick look at reactions from banks reveals opinions across the hawk/dove spectrum - but at the end of the day, the US Dollar is seemingly no better or worse. After all, rate expectations for December remain intact around 68%, according to the December Fed funds futures contract (CME FedWatch has it at 69.5%).

However, despite the inclination it seems for the Fed to raise rates again in the next meeting or two (let's be real: if it's not December, they're going to wait until March for the next SEPs), there is clearly growing unease over the state of the US economy. The gist is basically that US productivity growth remains low, and as such, with material labor market slack remaining, the US may be stuck in a period of lower growth.

As such, the Fed is 'twisting' its language: it's sounding hawkish on the front-end; but increasingly dovish on the back-end. This is not a new phenomenon though as we first articulated in our November 2015 note, "Fed Rate Hike Cycle Doesn’t Necessarily Bode Well for US Dollar." Since early to mid-2015, the Fed has showed the proclivity to reduce its expected path of future interest rates (the glide path) which in turn has reduced the US Dollar's capacity to extend its rally from the 2012 lows.

If you think about this dance, with the Fed pulling forward short-term expectations while depressing longer-term expectations, it's evident why the US Dollar (via DXY) has moved sideways for the past two years. If anything, recent signals by the Fed suggest that more sideways trade within the DXY's 21-month range is set to continue for the foreseeable future.

See the video (above) for technical considerations in EUR/USD, GBP/USD, USD/JPY, EUR/JPY, GBP/JPY, EUR/GBP, and the USDOLLAR Index.

Read more: USD Seeks Boost from Two Fed Speakers, FOMC Minutes Today

--- 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