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
Bearish
Oil - US Crude
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
Wall Street
Mixed
Gold
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
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.38%, while traders in EUR/GBP are at opposite extremes with 65.20%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/WGk95Bnjx5
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Gold: -0.45% Oil - US Crude: -0.63% Silver: -1.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/RvLy6xA9Is
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: -0.06% 🇯🇵JPY: -0.15% 🇬🇧GBP: -0.22% 🇨🇦CAD: -0.32% 🇦🇺AUD: -0.38% 🇪🇺EUR: -0.43% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/MZIiNOFxXu
  • Hey traders! Wrap up your week with a market update from @DailyFX Chief Strategist @JohnKicklighter 👇 https://t.co/DHufbBKbDu
  • Canadian PM Trudeau says Canada purchasing 20 million vaccine doses from Astrazeneca -BBG
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: US 500: 0.26% France 40: 0.03% Wall Street: 0.02% FTSE 100: -0.06% Germany 30: -0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/jByk8LUAt6
  • UK Government Official says either outcome is possible on Brexit
  • UK Government Official says if gaps in fisheries and level playing field are bridged, the EU's more constructive attitude will need to be translated into more realistic positions in the days to come
  • Big headline that says the EU has informed the UK that it must commit to some key demands in next week's trade talks if there is progress before the October deadlines. That said, I don't think this is a particularly new refrain between those two. It's the clock that matters
  • RT @Tams707: #USDZAR tests trendline resistance. Potential breakout in play? https://www.dailyfx.com/forex/market_alert/2020/09/25/South-African-Rand-Price-Forecast-USDZAR-Breakout-Potential-Brewing-LiveEdu-TDC.html
US Dollar as ‘Data Dependent’ as the Fed as NFPs Approach

US Dollar as ‘Data Dependent’ as the Fed as NFPs Approach

2015-08-01 02:53:00
John Kicklighter, Chief Strategist
Share:
A Busy Docket this Week Punctuated by NFPs and PCE

Fundamental Forecast for Dollar: Neutral

  • The week ahead will be bookended by key event risk – Monday’s PCE inflation report and Friday’s NFPs
  • A ‘neutral’ stance from the FOMC statement last week indicative of more bias than the market accounts for
  • Join DailyFX Analysts for daily discussions on the Dollar and FX markets at DailyFX on Demand

There are periods where the Dollar – and all other assets for that matter – finds its price action is divorced from the influence of regular event risk. This does not look to be one of those times. While there are still high-level fundamental themes still churning behind the scenes and Summer trading conditions seem to be in full swing for the capital markets, the focus has turned to very specific milestones. One of the most critical landmarks is the timing for the Fed’s first move to tighten lending rates. That represents both a competitive turn for the Greenback and a turning point for speculation supported by ‘easy money’. This past week, the Fed left some with a sense of ambiguity as to their intentions, but what they intended to do was to turn the focus back to the data.

Looking to the past week’s headlines, there were two particular events that drew the market’s attention: the FOMC rate decision and the 2Q US GDP release. On paper, both seemed to ‘meet expectations’. However, context puts their outcome in a different light. The painful 0.2 percent contraction in the economy reported in the ‘preliminary’ measure of 1Q GDP jeopardized the central bank’s intentions to normalize policy. Yet, with the subsequent update, the economy returned to a solid pace of expansion (2.3 percent) and the previous period’s reading was revised up to a less traumatic 0.6 percent growth.

A similar perspective shift comes from the Fed’s policy statement. While the communique from the policy makers wouldn’t promise any changes or times frames, their tone and assessment of the environment didn’t change from the previous meeting. That is significant as the June gathering was accompanied by updated forecasts where the Committee maintained a consensus forecast for 50 basis points (two standard 0.25 percent moves) worth of rate hikes this year. Had they been concerned, an air of caution would have replaced the concerted effort to prepare the masses for liftoff.

Gauging the course on interest rates – which FX traders are doing for yield advantage while capital market traders assess for low-cost speculation – is now the raison d’etre. For the Fed, the decision is not made but rather depends on a consistency in the general trend in data that we have seen unfold over the months. Should the current keep its pace or accelerate, a September rate hike will be the likely result. Should it subside, the probability shifts to a later start.

This week, we will come across two particular indicators in a busy docketthat are important for shaping rate expectations. Monday’s PCE deflator is the Fed’s favored inflation measure. Friday’s July labor report will generate headlines with its NFP print, but the policy speculation will center on the wages component – the wellspring of inflation. If this data misses or beats, few will miss the implications. – JK

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

DISCLOSURES