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
Wall Street
Bullish
Gold
Mixed
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
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
More View more
Real Time News
  • Trump Press Briefing: - We will be ready to distribute vaccine when its ready. We are seeing promising signs.
  • President Trump signs Hong Kong sanctions bill targeting banks and ends special status agreement. "Hong Kong will now be treated the same as mainland China" $USDHKD
  • Trump China Briefing: - We've been tough on the WTO - We withdrew from WHO. Maybe some day we will rejoin. - Make no mistake, we hold China fully accountable for virus and for unleashing it upon the world
  • Trump China Briefing: - We convinced many countries not to use Huawei - If they want to do business with us they can't use Huawei
  • Trump China Briefing: - Signed executive order to hold China accountable for repressive actions against people of Hong Kong - HK will now be treated the same as mainland China. No export of sensitive tech
  • On the back of a failed move lower, EUR/GBP has advanced and bulls are eyeing a retest of the June high. Get your $EURGBP market update from @RichardSnowFX here:https://t.co/M3xRD92zLC https://t.co/RP6XaFDMOv
  • USD/CAD continues to hold the month-old range, even as the US Dollar pushes down to a fresh low.Get your $USDCAD technical analysis from @JStanleyFX here: https://t.co/K5VuRiqKbt https://t.co/fjCoHrfTsq
  • 20 minutes and still waiting... https://t.co/HCRZTzsFfS
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.54% 🇪🇺EUR: 0.50% 🇨🇭CHF: 0.18% 🇬🇧GBP: 0.01% 🇨🇦CAD: -0.04% 🇳🇿NZD: -0.13% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/q9n02VIlgQ
  • Heads up: Trump holding press conference relating to China in less than 5 minutes. Super important to monitor especially with APAC session creeping up.
Euro ‘Funding-Currency’ Status at Risk on Hawkish Fed Outlook

Euro ‘Funding-Currency’ Status at Risk on Hawkish Fed Outlook

2015-09-11 22:36:00
David Song, Strategist
Share:
Euro ‘Funding-Currency’ Status at Risk on Hawkish Fed OutlookEuro ‘Funding-Currency’ Status at Risk on Hawkish Fed Outlook

Fundamental Forecast for Euro:Neutral

The Federal Reserve’s September 17 interest rate decision may heavily impact the near to medium-term outlook for EUR/USD especially as the European Central Bank (ECB) shows a greater willingness to further embark on its easing cycle.

EUR/USD remained bid ahead of the Fed’s policy meeting as market participants continue to treat the Euro as a funding-currency, but the fresh rhetoric coming out of the Federal Open Market Committee (FOMC) may bring the broader fundamentals back in play amid the deviation in the policy outlook. Despite waning expectations for a September liftoff, the Fed may stay on course to lift the benchmark interest rate in 2015 as central bank officials still anticipate a stronger recovery to emerge over the remainder of the year.

As a result, the fresh updates coming out of the FOMC may heighten the appeal of the greenback and undermine the recent advance in EUR/USD should Chair Janet Yellen make an increased effort to prepare U.S. households and businesses for higher borrowing-costs. In contrast, another unanimous vote to retain the current policy paired with more of the same language from the July 29 rate decision may highlight the risk for a further delay of the normalization cycle as the central bank pays increased attention to the downside risks surrounding the global economy.

In contrast, the recent commentary coming out of the ECB suggests that the Governing Council stands ready and willing to implement additional monetary support as weak energy prices accompanied by the resilience in the single currency dampens the outlook for inflation. In turn, the ECB may have little choice but to increase the duration/scope of its quantitative easing program as the central bank struggles to achieve its one and only mandate for price stability.

With that said, the long-term bearish outlook for EUR/USD may come back into light should the Fed keep a 2015 liftoff on the table, and signs for an looming rate hike may put the exchange rate under pressure as interest rate expectations pickup.

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

DISCLOSURES

News & Analysis at your fingertips.