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
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
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
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
USD/JPY
Mixed
More View more
Real Time News
  • 🇯🇵 JPY Eco Watchers Survey Outlook SA (MAR), Actual: 18.8 Expected: 20.0 Previous: 24.6 https://www.dailyfx.com/economic-calendar#2020-04-08
  • 🇯🇵 JPY Eco Watchers Survey Current (MAR), Actual: 14.2 Expected: 22.4 Previous: 27.4 https://www.dailyfx.com/economic-calendar#2020-04-08
  • 🇯🇵 JPY Eco Watchers Survey Current (MAR), Actual: 14.2 Expected: 22.0 Previous: 27.4 https://www.dailyfx.com/economic-calendar#2020-04-08
  • Heads Up:🇯🇵 JPY Eco Watchers Survey Outlook SA (MAR) due at 05:00 GMT (15min), Actual: N/A Expected: 19.0 Previous: 24.6 https://www.dailyfx.com/economic-calendar#2020-04-08
  • Heads Up:🇯🇵 JPY Eco Watchers Survey Current (MAR) due at 05:00 GMT (15min), Actual: N/A Expected: 22.0 Previous: 27.4 https://www.dailyfx.com/economic-calendar#2020-04-08
  • 🇯🇵 JPY Bankruptcies (YoY) (MAR), Actual: 11.78% Expected: N/A Previous: 10.71% https://www.dailyfx.com/economic-calendar#2020-04-08
  • #Bitcoin prices may see a pickup in volatility ahead of the 2020 halving as the #coronavirus pandemic threatens to disrupt cross-continental $BTC mining operations. Get your market update from @ZabelinDimitri here: https://t.co/BoH24NcPWn https://t.co/fPHcZECKdU
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.58%, while traders in US 500 are at opposite extremes with 66.72%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/e4iJk9c1W0
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.13% 🇬🇧GBP: -0.15% 🇪🇺EUR: -0.24% 🇳🇿NZD: -0.32% 🇨🇦CAD: -0.33% 🇦🇺AUD: -0.48% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/yI2N2rDljq
  • Heads Up:🇯🇵 JPY Bankruptcies (YoY) (MAR) due at 04:30 GMT (15min), Actual: N/A Expected: N/A Previous: 10.71% https://www.dailyfx.com/economic-calendar#2020-04-08
Australian Dollar at a Crossroads as Focus Turns to FOMC

Australian Dollar at a Crossroads as Focus Turns to FOMC

2014-01-25 03:44:00
Ilya Spivak, Head Strategist, APAC
Share:
Australian_Dollar_at_a_Crossroads_as_Focus_Turns_to_FOMC_body_Picture_5.png, Australian Dollar at a Crossroads as Focus Turns to FOMC

Fundamental Forecast for Australian Dollar: Neutral

  • Australian Dollar Sank to a 3.5 Year Low Amid Risk Aversion Last Week
  • Forward Outlook Clouded as the Spotlight Turns to the FOMC Outcome
  • Help Time Key Turning Points for the Australian Dollar with DailyFX SSI

The Australian Dollar continued to sink last week, dropping 1.1 percent against its US namesake to settle at the weakest level in three and a half years. The currency veered away from its relationship with US Treasury yields – a reflection of sensitivity to the Fed monetary policy outlook – to take cues from risk sentiment trends. Indeed, last week’s selloff tracked a sharp downward reversal in the MSCI World Stock Index while the rate on the benchmark US 10-year note fell to the lowest in two months (2.715 percent).

Another rotation in the driving catalysts behind Aussie price action may on tap in the week ahead as the spotlight turns to the FOMC monetary policy meeting. The sit-down will mark the first outing to be led by newly-minted Fed Chair Janet Yellen. Expectations call for another $10 billion cutback in aggregate QE, spread evenly between purchases of MBS and Treasury bondsecurities. While a mixed tone to US economic news-flow in recent weeks has introduced a degree of speculation about a pause in the “tapering” process, commentary from Fed officials has forcefully dismissed such concerns, suggesting stimulus reduction will proceed as advertised.

Confirmation of another $10 billion cutback would effectively reflect the FOMC policy status quo as established at December’s meeting. With that in mind, traders will be keen to dissect the text of the statement accompanying the announcement. On this front, the spotlight will be on any changes in the forward-guidance framework accompanying the QE cutback process. The US unemployment rate averaged 7.3 percent in 2013, a hair higher than the 7.0-7.1 percent range expected by the FOMC in December’s updated set of economic forecasts. Inflation expectations derived from bond yields (so-called “breakeven rates”) are pointing to price growth below 2 percent in the next 1-2 years, hinting the 2.5 percent bound set by the FOMC is not in danger.

On balance, this points to a lack of urgency in tinkering with any of the central bank’s key strategy components in the near term. Such an outcome may reignite interest in the Fed’s gradual shift away from the dovish extreme of the monetary policy spectrum, pushing yields higher and weighing on spread-sensitive currencies including the Aussie. The re-emergence of a positive relationship between the Australian unit and sentiment trends may make for an interesting transitional period however. Pro-taper developments have turned out risk-positive of late, seemingly reflecting traders’ growing confidence in the resilience of the US economy. If a confident FOMC is on-boarded as a sign of firming recovery and brightens the markets’ mood, AUD may yet find a near-term lifeline. -IS

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

DISCLOSURES

News & Analysis at your fingertips.