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.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Mixed
USD/JPY
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
Bullish
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • Knowing how to accurately value a #stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/2mjzvYvgSn
  • Previewing the Texas Rangers new home! https://t.co/WITZGSQPlc
  • Thanks for having me on @MartinSEssex https://t.co/fg8uOe16wr
  • The MACD is often used with its default setting when entering trades. However, this versatile indicator can be customized to assist traders in exiting trades too. Learn how to better incorporate the MACD into your trading strategy here: https://t.co/HnY7gzsI2q https://t.co/5F1DSvAXyy
  • What are some factors affecting $GBP as we head into 2020, quarter one? Download your Sterling fundamental forecast with @nickcawley1 here to find out: https://t.co/YfDSYSATK9 https://t.co/ANFLIuDY4J
  • Trading Global Markets new #podcast features @DailyFX Anlayst @PeterHanksFX , who discusses what assets would benefit in the next #recession. Tune into this new podcast episode hosted by @MartinSEssex here: https://t.co/Twr44cZ1GB https://t.co/llKzvZGDpQ
  • The #Euro remains weak against a range of currencies and any move higher is struggling to gain traction as the single currency continues to be sold-off. Get your #EUR technical analysis from @nickcawley1 here: https://t.co/9B2m0kmd4d https://t.co/ZENxpC59mP
  • The Indian Rupee 2020 outlook is bearish as India faces stagflation risk amid rising onion and crude oil prices. $USDINR may rise in the medium-term as the RBI defers hiking rates. Get your market update from @ddubrovskyFX here: https://t.co/lRrlZjAQDw https://t.co/mFv1EOYMjG
  • The $GBP may be on the cusp resuming a 12-year downtrend against the US Dollar as signs of topping emerge at pivotal chart resistance. Get oyur market update from @IlyaSpivak here:https://t.co/9rM3OjWmBA https://t.co/sUWcSFruHw
  • The $NZD may be on average at risk to further losses against its major counterparts such as the US Dollar and Japanese Yen. Where to for NZD/USD and NZD/JPY from here? Find out from @ddubrovskyFX here:https://t.co/OFjePKYdCb https://t.co/eo1c6QAVd8
Preview for June FOMC Meeting and Outlook for US Dollar

Preview for June FOMC Meeting and Outlook for US Dollar

2018-06-13 12:15:00
Christopher Vecchio, CFA, Sr. Currency Strategist
Share:

Talking Points:

- The DXY Index is gaining for a third straight day ahead of an expected 25-bps rate hike by the Federal Reserve later this afternoon.

- However, with rates markets pricing in a 100% probability of a hike, forward guidance - the path for hikes in the remainder of 2018 - will be the pivotal aspect of today's rate decision.

- See the full DailyFX Webinar Calendar for upcoming strategy sessions pertaining to the June FOMC and ECB meetings.

Looking for longer-term forecasts on the US Dollar? Check out the DailyFX Trading Guides.

As we await the conclusion of the June FOMC meeting later today, Fed funds futures are pricing in a 100% chance of a 25-bps rate hike – just as they have since the end of April. The US Dollar (via the DXY Index) is pressing forward for a third straight day ahead of what is essentiallly a guaranteed policy move.

As has been the case when front month odds are at 100%, the direction of the US Dollar is not contingent on the Fed raising rates but rather what expectations are set for the path of rate hikes down the line. Currently, rates markets are pricing in additional 25-bps hikes in September and December, with odds pegged at 77% and 51%, respectively.

Table 1: Fed Rate Hike Expections (June 13, 2018)

Preview for June FOMC Meeting and Outlook for US Dollar

With regards to the latter pricing, December odds have more than doubled from their low at the end of April, over which time the DXY Index has rallied by more than 4%. It would thus stand to reason that the DXY Index will be less sensitive to the rate hike itself today and more sensitive to the perspection of the pace of future tightening.

Accordingly, the biggest source of volatility for the US Dollar will come from the updated Summary of Economic projections. With the unemployment rate below 4% and headline US infllation at its highest rate in more than six years, there is a legitimate case to be made by Fed officials that the odds of two more rate hikes this year is more than a coin flip - and at 51% implied probablity, odds for four cumulative hikes this year is basically a coin flip.

To this end, an upgraded Summary of Economic Projections coupled with a tone tilted more hawkish today by Fed Chair Jerome Powell should prove supportive for the US Dollar.

See the above video for more on the tone needed from the Federal Reserve to lift the US Dollar, what to expect from the European Central Bank tomorrow, as well as technical considerations in the DXY Index, EUR/USD, GBP/USD, USD/JPY, Gold, and the S&P 500.

Read more: US Dollar Shrugs Off Trump-Kim Summit, Eyes FOMC and ECB

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.