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
Mixed
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
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
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
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Last week, Gold rallied to an over seven and a half-year high then retreated after. Will today’s US non-Manufacturing ISM numbers (15:00UK) push the yellow metal even higher? #Gold, #USeconomy, #USD https://t.co/MnX3ozkrUu
  • Tune in to @nickcawley1 's #webinar at 6:30 AM ET/10:30 AM GMT to prepare for key UK events and markets in the week ahead. Register here: https://t.co/xewSeUoDaT https://t.co/WBZiTNxKIY
  • 💶 Retail Sales YoY (MAY) Actual: -5.1% Expected: -7.5% Previous: -19.6% https://www.dailyfx.com/economic-calendar#2020-07-06
  • Heads Up:💶 Retail Sales YoY (MAY) due at 09:00 GMT (15min) Expected: -7.5% Previous: -19.6% https://www.dailyfx.com/economic-calendar#2020-07-06
  • 🇬🇧 Construction PMI (JUN) Actual: 55.3 Expected: 47 Previous: 28.9 https://www.dailyfx.com/economic-calendar#2020-07-06
  • Missed today's Cross-Market Weekly Outlook webinar? See the recording here - https://t.co/lnB12vU3A4 #markets #outlook #Fed
  • BoJ likely to keep maintain stance that economy will recover gradually later this year from COVID-19
  • Heads Up:🇬🇧 Construction PMI (JUN) due at 08:30 GMT (15min) Expected: 47 Previous: 28.9 https://www.dailyfx.com/economic-calendar#2020-07-06
  • Have you been catching on your @DailyFX podcast "Global Markets Decoded"? Catch up on them now, before new episodes release! https://t.co/Twr44cZ1GB https://t.co/3eRiyhBW8i
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.41%, while traders in US 500 are at opposite extremes with 71.46%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/8FDsfH3v3q
Fed Preview: U.S. Dollar to Benefit From Hawkish Forward-Guidance

Fed Preview: U.S. Dollar to Benefit From Hawkish Forward-Guidance

2018-08-01 15:00:00
David Song, Strategist
Share:

Trading the News: Federal Open Market Committee (FOMC) Interest Rate Decision

The Federal Reserve interest rate decision may spark a limited reaction as the central bank is widely expected to keep the benchmark rate on hold, but a shift in the forward-guidance for monetary policy may alter the near-term outlook for EUR/USD as Fed officials stick to the hiking-cycle.

Image of DailyFX economic calendar

Fresh comments from Fed officials may heighten the appeal of the U.S. dollar as the central bank appears to be on track to further normalize monetary policy, and Chairman Jerome Powell & Co. may ultimately prepare U.S. households and businesses for an imminent rate-hike as ‘the FOMC believes that--for now--the best way forward is to keep gradually raising the federal funds rate.

As a result, a batch of hawkish Fed rhetoric may weigh on EUR/USD, but more of the same from the central bank may produce headwinds for the U.S. dollar as it dampens bets for four Fed rate-hikes in 2018.Sign up and joinDailyFX Chief Strategist John Kicklighter LIVE to cover the FOMC interest rate decision.

Impact that the Fed rate decision has had on EUR/USD during the previous meeting

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

JUN

2018

06/13/2018 18:00:00 GMT

1.75% to 2.00%

1.75% to 2.00%

+1

+5

June 2018 Federal Open Market Committee (FOMC) Interest Rate Decision

EUR/USD 5-Minute Chart

Image of EURUSD 5-minute chart

As expected, the Federal Open Market Committee (FOMC) delivered a 25bp rate-hike at the quarterly meeting in June, with the central bank increasing the benchmark interest to a fresh target range of 1.75% to 2.00% as ‘recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly.’ The fresh comments suggest the Fed will continue to alter the forward-guidance while normalize monetary policy in 2018 as the ‘Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term.

The initial decline in EUR/USD was short-lived, with the exchange rate bouncing back from a low of 1.1725 to close the day at 1.1791. Review the DailyFX Advanced Guide for Trading the News to learn our 8 step strategy.

EUR/USD Daily Chart

Image of EURUSD daily chart
  • The string of failed attempts to test the July-high (1.1791) may push EUR/USD back towards the lower bounds of its recent range, with the 1.1510 (38.2% expansion) region on the radar as it largely lines up with the June-low (1.1508).
  • Need a break/close below the stated region to open up the downside targets for EUR/USD, with the first region of interest coming in around 1.1390 (61.8% retracement) to 1.1400 (50% expansion) followed by the 1.1290 (61.8% expansion) hurdle.

For more in-depth analysis, check out the Q3 Forecast for EUR/USD

Additional Trading Resources

New to the currency market? Want a better understanding of the different approaches for trading? Start by downloading and reviewing the DailyFX Beginners Guide!

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader series on how to effectively use leverage along with other best practices that any trader can follow.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

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

DISCLOSURES

News & Analysis at your fingertips.