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.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
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
Wall Street
More View more
Real Time News
  • The British Pound may fall if EU and UK negotiators fail to reach a consensus as the December 31 deadline nears. The third presidential debate is on deck, how might markets react? Find out from @ZabelinDimitri here:
  • “National security officials on Wednesday announced that Iran and Russia have obtained swaths of voter registration information that could support their efforts to interfere in the 2020 presidential election” - Politico
  • Market Snapshot #SP500 and #ASX200 futures sliding lower after the US government stated that Iran and Russia have been attempting to interfere in the #USPresidentialElections2020 The risk-sensitive $AUDUSD losing ground while the 'safe haven' $JPY and $USD gain ground
  • 🇯🇵 Foreign Bond Investment (17/OCT) Actual: ¥419.8B Previous: ¥1946.5B
  • FBI to make an announcement on a ‘major election security’ issue shortly - CNBC
  • US Director Of National Intelligence Radcliffe: Identified Russia, Iran Have Taken Action To Interfere With Election
  • Heads Up:🇯🇵 Foreign Bond Investment (17/OCT) due at 23:50 GMT (15min) Previous: ¥1946.5B
  • The Dow Jones, S&P 500 and AUD/USD could be at risk of extending losses as retail investors increase upside exposure. What are key technical levels to watch for? Find out from @ddubrovskyFX here:
  • An average of US 10Y and 30Y Treasury yields has hit its highest since early June, taking out the ceiling established in late August Confidence in a fiscal package seems to be being relayed in bonds for the time being Meanwhile the anti-risk #USD took another hit over past 24hr
  • The Australian Dollar is once again testing a critical support zone and we’re looking for inflection this week. Get your $AUD technical analysis from @MBForex here:
DXY Index Clears February Highs as March Hike Odds Surge

DXY Index Clears February Highs as March Hike Odds Surge

2017-03-01 12:40:00
Christopher Vecchio, CFA, Senior Strategist

Talking Points

- US President Trump checks all the boxes markets were looking for, mainly infrastructure spending and tax cuts.

- Consistent hawkish commentary from Fed speakers past 24-hours raises specter of a hike this month - Fed funds now pricing in 80% chance.

- Positioning in USD/JPY is nearing a turning point, which would be a positive development for a broader DXY Index rally.

Between several hawkish comments from Fed policymakers and markets hearing everything they needed to in the US president's address to a joint session of Congress, the odds of a March rate hike have surged. In turn, with short-term US yields shooting up, the US Dollar Index (DXY) has been quick to take out the February high set on February 15.

Chart 1: DXY Index & US 2-year Yield 4-hour Timeframe (January 9 to March 1, 2017)

DXY Index Clears February Highs as March Hike Odds Surge

In the past 48-hours, we've heard from the Fed's Kaplan, Williams, Bullard, and Dudley, all of whom have painted a clear picture that a March rate hike is not merely an outside threat, but a very real possibility, thanks to the economy being at "full employment" and inflation (both headline and core) pushing through the Fed's medium-term target of +2%.

Confirming the need for higher rates, at least in the FX and rates markets' minds, was the speech given by US President Donald Trump last night. While details were still lacking, it's clear that there are specific policy goals that the 45th President of the United States intends to accomplish in order to boost US growth: a $1 trillion infrastructure spending program, funded by both public and private sources; and a tax reform plan that would cut taxes for both consumers and businesses, in what was a vague endorsement of a border-adjustment tax scheme.

As per the Mundell-Fleming framework (or IS-LM-BOP model), given the United States' high capital mobility, loose fiscal policy should lead to a rise in inflationary pressures, which in turn should necessitate tighter monetary policy from the Federal Reserve. Indeed, markets have gravitated towards this point of view, with the odds of a March rate hike surging up to 80% today thanks to the commentary from Fed officials and speech from US President Trump. Markets are now pricing in hikes in March and September, with north of a 50% chance of a third hike this year in December.

The factors that drove the US Dollar higher, US Treasury yields higher, and US equity markets higher in the immediate wake of the November 8 election - what constitutes the "Trump reflation trade" - seem to be very much back in play.

See the above video for technical considerations in DXY Index, AUD/USD, EUR/USD, USD/CAD, AUD/JPY, USD/JPY, and Crude Oil.

Webinar Schedule for Week of February 26 to March 3, 2017

Monday, 7:30 EST/12:30 GMT: FX Week Ahead: Strategy for Major Event Risk

Wednesday, 6:00 EST/11:00 GMT: Trading Q&A

Thursday, 7:30 EST/12:30 GMT: Central Bank Weekly

Read more: Stacked US Economic Calendar, Trump ’SOTU’ has DXY on Edge

--- Written by Christopher Vecchio, Senior Currency Strategist

To contact Christopher Vecchio, e-mail

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.