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.

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
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
Wall Street
Bearish
Gold
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
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Emotions are often a key driving force behind #FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here:https://t.co/eILWbFgHRE https://t.co/462aKuf7kL
  • 🇨🇭 Balance of Trade (SEP) Actual: CHF2.7B Previous: CHF3.3B https://www.dailyfx.com/economic-calendar#2020-10-20
  • 🇨🇭 Balance of Trade (SEP) Actual: CHF2.7B Previous: CHF3.4B https://www.dailyfx.com/economic-calendar#2020-10-20
  • Heads Up:🇨🇭 Balance of Trade (SEP) due at 06:00 GMT (15min) Previous: CHF3.4B https://www.dailyfx.com/economic-calendar#2020-10-20
  • Market Snapshot Broad risk-off tilt seen throughout APAC trade as the haven-associated $USD and $JPY climbed higher against their major counterparts #SP500 futures, #crudeoil and Australia's #ASX 200 index all losing ground alongside the risk-sensitive $AUDUSD https://t.co/axRzXuwo3t
  • USD hegemony is at risk thanks to changes in the global economy and the long-term consequences of the US-China trade war. Get your market update from @CVecchioFX here: https://t.co/7HzovoH1fH https://t.co/4ANpmSHD2c
  • What kind of 'safe haven' falls with stocks and risk-on currencies like AUD and NZD while anti-risk JPY and USD tellingly rise? Good question, #gold prices. Good question. #XAUUSD https://t.co/YDhkJ4EkRB
  • A forex trader is strategic, disciplined and always switched on to the markets. Learn how to build an FX mindset here: https://t.co/ujEpfmO6C4 https://t.co/YbEAje1YPz
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.93%, while traders in EUR/USD are at opposite extremes with 66.81%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/1ackXDHUXJ
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.07% 🇨🇭CHF: 0.01% 🇨🇦CAD: 0.01% 🇯🇵JPY: -0.10% 🇦🇺AUD: -0.29% 🇳🇿NZD: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/WcMBL3OPd6
US Dollar May Rise if US Data Exacerbates Recession Fears

US Dollar May Rise if US Data Exacerbates Recession Fears

2019-08-15 06:30:00
Dimitri Zabelin, Analyst
Share:

US DOLLAR, STOCK SELLOFF, RECESSION– TALKING POINTS

  • US Dollar may gain if US economic data misses estimates, spooks markets
  • Stock sell off may continue and redirect capital into the anti-risk US Dollar
  • Recessionary fears may overwhelm optimism from Fed rate cut expectations

Learn how to use political-risk analysis in your trading strategy!

The US Dollar may rise against its major counterparts if critical US data – retail sales and industrial production – point to a weaker economy and greater need for accommodative monetary policy. Stock markets may be buoyed by the prospect of cheap credit, though given the current environment of growing recessionary fears, poor data may only just exacerbate the selloff in equities and stoke demand for the US Dollar.

Since February, US economic data has been tending to underperform relative to economists’ expectations, so it would not be surprising to see these reports fall in line with the broader trend. What is even more worrisome is if markets begin to price in dovish expectations from the Fed that are beyond the scope of what the actual central bank has outlined. The last time this happened, equities were hit hard by the July 31 FOMC meeting.

Fed Chairman Jerome Powell said the rate cut was not necessarily the start of an easing cycle but rather a preventative measure used as insurance for future uncertainty. Part of which is the ongoing US-China trade war that continues to plague investors and hamper cross-border investment. The IMF’s recent publication of the updated world economic outlook highlighted trade tensions as a major culprit behind global deceleration.

The sentimentally-fragile environment may have also been compounded by preliminary German GDP numbers that show Europe’s largest economy contracting in the second quarter. This comes while the continent is also struggling with inter-regional politics – namely Brexit and Italy. Against the backdrop of a slowing global economy, political shocks are amplified by virtue of the underlying economic weakness.

CHART OF THE DAY: US EQUITY SELLOFF AMID FEARS OF A RECESSION

US Dollar May Rise if US Data Exacerbates Recession Fears

S&P 500 chart created using TradingView

FX TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

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

DISCLOSURES