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
More View more
Real Time News
  • Heads Up:🇦🇺 RBA Meeting Minutes due at 01:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-21
  • New Zealand reports 14 new local Covid cases - BBG
  • I had a chance to talk with @tastytradeRyan and @victorJ0NES about Evergrande and its impact on US markets — always great talking with these two guys on Mondays. https://t.co/vddTknnPWC
  • RT @cheddar: Stocks dropped the most since May on Monday, sending shockwaves through Wall Street. @CVecchioFX explains the global impact of…
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here: https://t.co/DWm7cBMUg9 https://t.co/EegiwWMe9V
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDdK93P https://t.co/ZE0Hgn9PCM
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePT7Yu8 https://t.co/GFx3b1W0OD
  • RBNZ's Hawkesby talking "considered steps" when setting monetary policy, leaning towards 25bps - With money markets pricing in 31bps worth of tightening at the October meeting. Room for disappointment. https://t.co/C7DHnPIeuU https://t.co/K2835aP57Z
  • Gold has plunged nearly 5% off the Monthly high with the sell-off now probing key weekly support here at 1738/47- looking for a pivot here with the Fed interest rate decision on tap. Get your $XAUUSD market update from @MBForex here:https://t.co/Vnxi4143uT https://t.co/zTpqrFIZfk
  • RBNZ: - We have benefitted from a robust rebound in China, our main trading partner - The interruption to the economy's supply side has lasted longer than expected
Forex Analysis: Dollar to Fall if US Officals Reach Fiscal Cliff Deal

Forex Analysis: Dollar to Fall if US Officals Reach Fiscal Cliff Deal

Ilya Spivak, Head Strategist, APAC

The US Dollar is likely to weaken against most of its top counterparts if US lawmakers manage to secure a deal avoiding the fast-approaching “fiscal cliff”.

Talking Points

  • US Dollar to Decline if US Policymakers Secure “Fiscal Cliff” Accord
  • Japanese Yen Sold on Speculation Abe Government to Debase Currency

The spotlight remains on Washington, DC as financial markets return from the Christmas holiday, where US policymakers have a mere five days left to deliver a deal avoiding the so-called “fiscal cliff”, a set of tax hikes and government spending cuts due to trigger at the turn of the year. The Congressional Budget Office (CBO) projects the jolt of austerity will tip the US back into recession.

The markets’ baseline scenario appears to call for a last-minute compromise that avoids an immediate fiscal shock but falls short of setting US public finances on a sustainable long-term path. The emergence of a loose framework for negotiating a “grand bargain” in the future also seems to be baked in.

While a watered-down accord is undeniably better for market-wide risk appetite than none at all, follow-through is likely to be limited to a short-term advance reflecting the dissipation of uncertainty. Indeed, with investors’ forecasts validated, the impetus for speculation evaporates.

For forex markets, a fiscal cliff deal is likely to broadly weigh on the US Dollar amid ebbing safe-haven demand for the benchmark currency. A lone exception may be found in the greenback’s pairing with the Yen, where the focus remains on domestic policy. Indeed, the Japanese unit hit a 20-month low against its top counterparts overnight amid speculation incoming Prime Minister Shinzo Abe will push to sharply weaken the currency in a bid to beat deflation.

Asia Session: What Happened

GMT

CCY

EVENT

ACT

EXP

PREV

1:30

CNY

Industrial Profits YTD (YoY) (NOV)

3.0%

-

0.5%

4:00

JPY

Vehicle Production (YoY) (NOV)

-8.4%

-

-12.4%

5:00

JPY

Housing Starts (YoY) (NOV)

10.3%

10.7%

25.2%

5:00

JPY

Construction Orders (YoY) (NOV)

-2.1%

-13.8%

5:00

JPY

Annualized Housing Starts (NOV)

0.907M

0.911M

0.978M

Euro Session: What to Expect

GMT

CCY

EVENT

EXP/ACT

PREV

IMPACT

7:00

CHF

UBS Consumption Indicator (NOV)

1.23 (A)

1.30

Low

7:45

EUR

French Consumer Confidence Indicator (DEC)

86 (A)

84

Low

7:45

EUR

French Producer Prices (NOV) (MoM)

-0.5% (A)

0.5%

Low

7:45

EUR

French Producer Prices (NOV) (YoY)

1.9% (A)

2.8%

Low

9:00

EUR

Italian Business Confidence (DEC)

88.8

88.5

Low

9:00

EUR

Italian Economic Sentiment (DEC)

-

76.4

Low

9:30

GBP

BBA Loans for House Purchase (NOV)

34500

33039

Medium

Critical Levels

CCY

SUPPORT

RESISTANCE

EURUSD

1.3178

1.3300

GBPUSD

1.6108

1.6170

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, please CLICK HERE

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

DISCLOSURES