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
Mixed
Oil - US Crude
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
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Some massive surges in Covid-19 cases worldwide: The US (+78,702 on Oct 24) France (+ 52,013 on Oct 25) Spain (+ 19,851 on Oct 23) UK (+ 19,790 on Oct 25) Germany (+ 11,176 on Oct 24) A virus resurgence dampened sentiment, weighing on equities, oil and growth-linked currencies.
  • Market Update Risk-off tilt persisting throughout APAC trade $USD gaining against all its major counterparts, with the cyclically-sensitive $AUD and $CAD the biggest underperformers #SP500 continuing to grind lower alongside #crudeoil, #gold and Australia's #ASX200
  • 🇯🇵 Leading Economic Index Final (AUG) Actual: 88.4 Expected: 88.8 Previous: 86.7 https://www.dailyfx.com/economic-calendar#2020-10-26
  • - British Pound braces for #Brexit as political volatility rattles GBP crosses - Australian Dollar traders closely eyeing Chinese Plenum and 5-year plan - #Euro, US Dollar price action may pick up on upcoming WTO tariff ruling https://www.dailyfx.com/forex/fundamental/article/special_report/2020/10/26/GBP-AUD-USD-Volatility-to-Swell-on-Cross-Continental-Geopolitical-Risks.html
  • Heads Up:🇯🇵 Leading Economic Index Final (AUG) due at 05:00 GMT (15min) Expected: 88.8 Previous: 86.7 https://www.dailyfx.com/economic-calendar#2020-10-26
  • Heads Up:🇯🇵 Coincident Index Final (AUG) due at 05:00 GMT (15min) Expected: 79.4 Previous: 78.3 https://www.dailyfx.com/economic-calendar#2020-10-26
  • WTI crude oil prices fell to US$ 39.16 amid a rapid climb in US coronavirus cases and stricter counter-virus measures across the EU. A key technical range of US$ 37.00 - 41.00 may define near-term trading with a bias towards the downside. https://t.co/MDmJMC6xnH
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.86%, while traders in EUR/USD are at opposite extremes with 74.29%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/gzrHLaRhHV
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: -0.07% 🇳🇿NZD: -0.10% 🇯🇵JPY: -0.15% 🇪🇺EUR: -0.22% 🇨🇦CAD: -0.24% 🇦🇺AUD: -0.34% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/zHVMRgn43I
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: FTSE 100: -0.41% France 40: -0.72% Wall Street: -0.75% US 500: -0.76% Germany 30: -1.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/qj3vTsWnmK
Australian Dollar May Drop as Fed Rate Hike Sinks Risk Appetite

Australian Dollar May Drop as Fed Rate Hike Sinks Risk Appetite

2015-12-12 01:43:00
Ilya Spivak, Head Strategist, APAC
Share:
Australian Dollar May Drop as Fed Rate Hike Sinks Risk AppetiteAustralian Dollar May Drop as Fed Rate Hike Sinks Risk Appetite

Fundamental Forecast for the Australian Dollar: Bearish

  • Australian Dollar Looks to Fed Policy Announcement for Guidance
  • Risk Aversion After FOMC Rate Hike May Drive Aussie Downward
  • Find Key Turning Points for the Australian Dollar with DailyFX SSI

The Federal Reserve monetary policy announcement is firmly in focus for the Australian Dollar in the week ahead. Chair Janet Yellen and company are widely expected to deliver the first post-QE interest rate hike, nudging the target range for the benchmark lending rate higher by 25 basis points into the 0.25-0.50 percent territory.

Fed Funds futures assign the outcome a priced-in probability of 81 percent. Market consensus appears tilted toward a “dovish hike”, meaning the increase is expected to be coupled with painstakingly cautious rhetoric signaling that the on-coming tightening cycle will be shallow and slow-moving.

Currency markets have been busy pricing in the Fed’s move toward the hawkish side of the policy spectrum since mid-2014, after it became clear that a growth dip in the first few months of tapering QE asset purchases will not derail the process. The US Dollar surged, adding over 16 percent since then and through this year against its leading counterparts.

A similar adjustment seems to have been absent on the risk sentiment front. The Fed’s aggressive easing over the past seven years slashed returns on safer assets and encouraged a reach for yield outward along the risk spectrum. Fears of on-coming stimulus withdrawal might have been expected to begin reversing this dynamic, but various false starts failed gain traction.

This warns that a period of portfolio readjustment is still pending and may be triggered in earnest once the rate hike is finally a reality. The ensuing risk aversion is likely to bode ill for the sentiment-linked Australian Dollar, sending the currency downward alongside stock prices. Indeed, the S&P 500 – a proxy for global risk trends – may be pre-positioning already having finished last week with the largest daily drop in over two months.

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

DISCLOSURES