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
GBP/USD
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
More View more
Real Time News
  • $EURUSD thwarted by support I think this'll break during Q4 - the next big support zone below runs from around 1448-1500 https://t.co/LnFGRIyfg3
  • 10-year US Treasury yields touching multi-week highs. EUR/USD is likely to re-test 1.1700 in the short-term. Get your $EURUSD market update from @nickcawley1 here:https://t.co/JBdGJ9iqhf https://t.co/hvLu72yDsD
  • This 👇 https://t.co/UH4A7C2HOO
  • $USDJPY has spanned its full, tight range. The has slightly broadened its smallest 30-day trading range (as a ratio of spot) on record. Serious breakout candidate should a firm risk or Fed rate speculation wind come through https://t.co/XyajC1dAee
  • Seems this once-Hawkish view from Cleveland Fed President Loretta Mester is becoming the consensus for the FOMC https://t.co/uHAmcRFNlG
  • - Supports November taper - Still some distance from maximum employment goal needed for raising rates
  • Fed's Mester - Economy has met substantial further progress bar for taper - On inflation bar for raising rates has largely been met - Expect conditions for first rate hike to be met by end of next year
  • Heads Up:🇬🇧 BoE Tenreyro Speech due at 13:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-24
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/HFl8E8exht
  • Credit Suisse dumped Evergrande exposure on risk fears - FT
Euro May Fall as Monetary Policy Trends Come Back in Focus

Euro May Fall as Monetary Policy Trends Come Back in Focus

Ilya Spivak, Head Strategist, APAC
Euro May Fall as Monetary Policy Trends Come Back in Focus

Fundamental Forecast for the Euro: Bearish

  • Seemingly complex Euro outlook masks textbook yield trends
  • Firmly dovish ECB posture means Euro path aims downward
  • Yellen testimony, G20 meeting may spark kneejerk volatility

What does retail traders’ positioning say about the Euro’s trend? Find out here!

At surface level, outlook for the Euro seems to be decidedly more complicated than most of its G10 counterparts. Political risk abounds. Populist forces look uncharacteristically strong ahead of key elections in Germany, France and the Netherlands. Italy may yet see an early election against a similar backdrop also.

Meanwhile, the start of Brexit negotiations looms ever closer. UK Prime Minister Theresa May is ably weaving around legal and legislative barriers to meet a self-imposed deadline of triggering Article 50 of the Lisbon Treaty by the end of the first quarter.

Finally, there is the dramatic shift in the tone of US policy with the ascension of President Donald Trump. The new administration has expressed its displeasure with what it sees as an unfairly weak Euro and clashed with ECB President Mario Draghi about post-crisis banking regulation.

Things are not as complex as they appear however. Weigh up the EUR/USD exchange rate against the spread between German and US front-end bond yields and a textbook fundamental narrative emerges – the single currency is falling as its expected rates advantage shrinks.

This makes sense. All that political uncertainty means the ECB is unlikely to change its dovish tune any time soon. Meanwhile, it seems clear that the Fed is aiming to raise rates, even if the extent of on-coming tightening is clouded amid lingering fiscal policy uncertainty.

This means the markets will find relatively little substance in fourth quarter Eurozone GDP figures or Germany’s ZEW survey of analyst sentiment in the week ahead. After all, whatever outcomes cross the wires probably don’t mean much for ECB policy near-term.

Semi-annual Congressional testimony from Fed Chair Janet Yellen may be a more potent catalyst. The Euro may get a lift if a cautious tone trims March rate hike bets. Follow-through may be limited however considering the priced-in probability of an increase is relatively modest at 28 percent.

A late-week meeting of G20 finance ministers in Germany may bring kneejerk volatility if the Trump administration’s combative stance on international trade and FX policy is on full display. A cordial Washington reception for Japanese Prime Minister Shinzo Abe suggests otherwise however.

On balance, an ultimate failure to dislodge the big-picture status quo is likely to bode ill for the single currency. Short-term price swings aside, there seems to be relatively little on offer in the days ahead that has real potential to divert the underlying, yields-based trend.

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

DISCLOSURES