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
More View more
Real Time News
  • RT @FxWestwater: Gold, Iron Ore Forecast: Prices Hinge on FOMC, Evergrande Crisis, China Steelmaking Curbs Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2021/09/21/Gold-Iron-Ore-Forecast-Prices-Hinge-on-FOMC-Evergrande-Crisis-Steelmaking-Curbs.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr h…
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM73cHA https://t.co/FsbhOelVEk
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCZ9dzS https://t.co/I8jJq8NGCH
  • We are heading into a Tuesday lull which precedes Wednesday's FOMC focus. Will the absence of distractions allow for risk trends to gain momentum or perhaps will Fed anticipation temper the $SPX tumble? My take: https://www.dailyfx.com/forex/video/daily_news_report/2021/09/21/Fed-Taper-Focus-May-Help-Stall-the-SP-500s-Collapse-Dollars-Charge.html https://t.co/T4m60xEfk6
  • CTV projects Trudeau wins his third term as Canada's Prime Minister - BBG
  • 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/KY6MiOC9Y6
  • US House Speaker Pelosi says top-line spending number may change but hopes for $3.5 trillion in spending bill - BBG
  • RBA Minutes: - Board committed to providing high level of monetary support - Q3 GDP expected to decline materially - Central scenario is rates on hold until 2024 - BBG $AUDUSD
  • Heads Up:🇦🇺 RBA Meeting Minutes due at 01:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-21
  • New Zealand reports 14 new local Covid cases - BBG
These Key Events Could Force the US Dollar Significantly Higher

These Key Events Could Force the US Dollar Significantly Higher

David Rodriguez, Head of Product
forex_us_dollar_to_see_substantial_volatility_as_forex_markets_heat_up_body_Picture_5.png, These Key Events Could Force the US Dollar Significantly Higher

These Key Events Could Force the US Dollar Significantly Higher

Fundamental Forecast for US Dollar: Bullish

The Dow Jones FXCM Dollar Index finished the month of August almost exactly where it started, but a critical week for forex markets almost guarantees that the Greenback will see much larger moves in days and weeks ahead.

It will be an alphabet soup of top-tier economic event risk across the globe as the Reserve Bank of Australia (RBA), Bank of Canada (BoC) Bank of Japan (BoJ), Bank of England (BoE), and European Central Bank (ECB) will announce interest rates and policy within the span of four days.

It may nonetheless be the US calendar to force the largest financial market moves with Friday’s critical US Nonfarm Payrolls (NFPs) report to set the stage for the all-important US Federal Open Market Committee (FOMC) policy announcement on September 18.

The median Bloomberg forecast for NFP’s predicts the US economy added 180k jobs in August and the national unemployment rate remained almost exactly unchanged at 7.4 percent—hardly a recipe for volatility. But the tight cluster of analyst estimates suggests that any significantly above or below-forecast Unemployment results could force big US Dollar moves. Why does it matter so much?

It all boils down to one question: when will the US Federal Reserve “taper” its aggressive Quantitative Easing policies and by how much? A strong upward revision to US economic growth estimates and sharp rises in US Treasury Bond/Note yields suggest the so-called “Septaper” is on track. But price action around major economic events has been erratic, and a big NFP disappointment could derail the nascent US Dollar recovery.

With that in mind we’ll look to the usual slew of pre-Nonfarm Payrolls data releases to guide expectations: US ISMManufacturing and Services, ADP Employment Change, and Initial Jobless Claims results may guide price action heading into Friday’s report.

Last week we wrote of two critical factors on why the US Dollar couldn’t hold its gains: low forex volatility and extremely one-sided sentiment.

On the sentiment front, our proprietary retail FX positioning data supports calls for Dollar strength. As far as volatility goes, a recent surge in forex volatility prices tells us what we already know: next week will be huge.

Geopolitical tensions surrounding Syria might also force short-term volatility, but market reactions to recent developments have been somewhat muted. We don’t think this will be a major theme across FX markets.

Is this the major turning point for the US currency? Forex seasonality studies show that currencies tend to make major highs/lows at the beginning and end of each period. The beginning of the new week, month, and quarter could very well bring the major USD breakout we’ve awaited. - DR

Receive future e-mail updates from this author via his e-mail distribution list.

Contact/follow via Twitter: http://www.twitter.com/DRodriguezFX

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

DISCLOSURES