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
  • The US Dollar seems to be back on the offensive against its major counterparts, pressuring EUR/USD and NZD/USD lower as USD/JPY consolidates. USD/CHF surges past key resistance. Get your market update from @ddubrovskyFX here:https://t.co/MrLGSp7FYa https://t.co/XS0176LyOg
  • The Japanese Yen remains in focus with strength potential on risk aversion themes to go along with weakness on themes around higher rates. Get your weekly $JPY technical forecast from @JStanleyFX here: https://t.co/l4UICqJzJy https://t.co/dQ2pS0E4fp
  • Google finance-related search interest in 'Evergrande' has almost overtaken 'Covid'. 'Taper' doesn't even register on the scale https://t.co/P6H9sHFVIB
  • Gold prices gain as potential systemic risks out of China's Evergrande Group roil broader markets. Meanwhile, iron ore is ticking higher after a big drop on Monday as China steps up steelmaking curbs. Get your market update from @FxWestwater here:https://t.co/l4kAWDJ2wm https://t.co/b9m5ADIqqb
  • Gold remains higher despite positive Evergrande news out of China. Meanwhile, copper bulls are pushing prices upward as the potential for a housing crisis in China ebbs. Get your market update from @FxWestwater here:https://t.co/TK3MNntBdA https://t.co/14UKjR4w6M
  • GBP/USD has flattened overnight after its strongest rally in a month on Thursday. The British currency has been under pressure recently as an energy crisis has caused a number of gas providers to go bankrupt. Get your market update from @HathornSabin here:https://t.co/3D8s2eIVWv https://t.co/JDGNwKYyOn
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/mfwJ0sIauS https://t.co/JIT5it2HAt
  • Gold could suffer further near-term losses due to rising U.S. Treasury yields and a weak technical picture for price action. Get your weekly gold forecast from @DColmanFX here: https://t.co/g9QvH3L4It https://t.co/Vz98E0Bl9U
  • Gold has been trending lower after failing to clear resistance in the $1835 area earlier this month. Get your $XAUUSD market update from @DColmanFX here:https://t.co/3hm1g3BHgf https://t.co/MdTQKEBCBx
  • Key break here in the 10-year #Treasury yield as it rises to the highest since late June Took out 1.4230 resistance, and the 100-day SMA Eyes now on the 38.2% Fib extension at 1.4775 Also potential falling resistance from March https://t.co/4cI6l210ui
US Dollar, Yen May Rise as the Fed Maintains Hawkish Bias

US Dollar, Yen May Rise as the Fed Maintains Hawkish Bias

Ilya Spivak, Head Strategist, APAC

TALKING POINTS – US DOLLAR, YEN, FED, BRITISH POUND, UK CPI, EURO, ITALY

  • US Dollar, Yen may rise as the Fed maintains a hawkish policy bias
  • British Pound unlikely to find a lasting catalyst in UK inflation data
  • Euro higher on hopes EU Commission will ratify Italy budget deal

The US Dollar is trading broadly lower ahead of the opening bell in Europe amid pre-positioning for the FOMC monetary policy announcement. The markets are angling for a dovish outcome. A rate hike is expected but traders envision a dovish shift in the central bank’s forecast for 2019.

The priced-in rate hike outlook implied in Fed Funds futures has dramatically deteriorated in recent weeks. Having fully priced in two hikes next year as recently as early November, it now puts the probability of just one increase as a barely better-than-even 56 percent.

A shift in Fed rhetoric against the backdrop of falling stock prices seems to be behind the adjustment. That might amount to wishful thinking however. While global economic activity has certainly decelerated and risk aversion looks acute, a mandate-minded US central bank seems likely to tighten further.

The latest CPI data put inflation on-trend for the year at 2.2. percent, wage growth is at a nine-year of 3.1 percent, and the jobless rate continue to hover at the lowest in five decades. For their part, Fed officials have consistently said that they will not back down unless a turn in the relevant data compels them.

The markets seem convinced that – when push comes to shove – the Chair Powell and company will relent. If they are wrong on that score, the US Dollar is likely to push aggressively higher. Sentiment will probably deteriorate as well in this scenario, bidding up the perennially anti-risk Japanese Yen.

BRITISH POUND MAY MOSTLY OVERLOOK UK CPI DATA

UK CPI data headlines the economic calendar in European trading hours. The headline inflation rate is expected to tick down to 2.3 percent while the core measure excluding volatile items like food and energy backs down to 1.8 percent.

Outcomes echoing deterioration in UK economic news flow relative to forecasts over the past three months may prove softer still. That may not amount to lasting selling pressure on the British Pound however considering its limited implications for near-term BOE monetary policy.

The central bank seems decidedly unlikely to raise rates as the threat of a “no-deal” Brexit looms large. The markets seem to agree: the priced-in outlook does not envision an increase at least until November of next year. With that in mind, there does not appear to be much room for a dovish shift in expectations.

EURO GAINS ON HOPES EU TO RATIFY ITALY BUDGET DEAL

The Euro outperformed in Asia Pacific trade amid reports that the European Commission may ratify an informal deal with Italy ending a months-long budget standoff and avoiding punitive measures. The spread between Italian and German 10-year bond yields has tellingly dropped to a three-month low.

The newswires have circulated comments from an unidentified Italian Treasury official saying the Commission will support a deal that puts Rome’s budget deficit at 2.04 percent of GDP next year. That’s down from the 2.4 percent in an earlier budget proposal that was rejected by Brussels.

See our free guide to learn how to use economic news in your trading strategy!

ASIA PACIFIC TRADING SESSION

Asia Pacific Trade Economic Calendar

EUROPEAN TRADING SESSION

European Trade Economic Calendar

** All times listed in GMT. See the full economic calendar here.

FX TRADING RESOURCES

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

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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

DISCLOSURES