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
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
Bullish
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
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/rOnWgIotlz
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Gold: 0.11% Oil - US Crude: 0.02% Silver: -0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ENxA7SeIDF
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.01% 🇨🇦CAD: -0.13% 🇪🇺EUR: -0.13% 🇨🇭CHF: -0.15% 🇬🇧GBP: -0.18% 🇦🇺AUD: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/cmUacZR1bK
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Gold are long at 87.12%, while traders in France 40 are at opposite extremes with 74.18%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/WKmgAjSLWR
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/3rXsyuSemd
  • Nasdaq 100 Rebounds as Tapering Fears Ease, Hang Seng and ASX 200 Climb https://www.dailyfx.com/forex/market_alert/2021/06/22/Nasdaq-100-Rebounds-as-Tapering-Fears-Ease-Hang-Seng-and-ASX-200-Climb.html https://t.co/NZxRtj3rNa
  • ANZ Bank sees New Zealand house prices increasing by 0.7% in 2022 - BBG
  • Ever wonder if there are other chart types that can be sued for technical analysis? HLOC charts are discussed in the following article as well as their pros and cons. Learn more here: https://t.co/qV3c7a4YR3 https://t.co/9ZUHvkEw7R
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/aGz502atu0
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/OibiizbywE
US Rate Speculation Versus a Tumultuous World of Fundamentals

US Rate Speculation Versus a Tumultuous World of Fundamentals

John Kicklighter, Chief Strategist
US Rate Speculation Versus a Tumultuous World of FundamentalsUS Rate Speculation Versus a Tumultuous World of Fundamentals

Fundamental Forecast for Dollar: Bullish

  • A slew of Fed speeches and November NFPs will pilot rate expectations that already see a 78% chance of a Dec hike
  • The greater fundamentals winds may come from the Dollar’s peers amid a round of rate decisions and SDR status checks
  • See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot

The week ahead is the antithesis of what we have come to expect from December. Seasonal studies say the month is historically a quiet one with a quiet build in risk appetite. Instead, we are heading into the first wave of a significant fundamental assault that will test already flimsy speculative forecasts while running a high risk of volatility. The question immediately on most FX traders’ minds is whether the standings of monetary policy biases shaped over the past few months will hold their course. Yet, participants of all markets should be more concerned over the implications of volatility against thin volume and a leveraged speculative exposure. These are circumstances ripe for liquidity problems and a dramatic shift in both market direction and pace.

It is natural for traders confronted with a wide docket of event risk and fundamental uncertainty to hone in on what they perceive to be the most market-moving potential spark and set their strategy and expectations from there. That would be a mistake if we were trading the Dollar this week. The favored indicator on the calendar ahead is the November NFPs (nonfarm payrolls) and its supporting cast of labor statistics. This data is certainly important. Relative monetary policy has been one of the most productive and constant fundamental themes in the currency market. NFPs is the last major statistic with a direct bead on policy that is scheduled to be released before the December 16 rate decision.

That said, the market is already well-prepared for the disparate bearing from the US currency. Where six weeks ago, Fed Fund futures were pricing in around 6 percent probability of a Fed hike before the end of the year; now same instrument shows hedgers set the chances at 78 percent. Where that leaves plenty of room to lift or lower the stakes, the reality is that the Fed – and thereby the Dollar – is in a unique position to tighten in a definable timeline where most other are proactively easing or neutral. In the data breakdown, the actual payrolls and unemployment rate will carry less weight than the participation and average earnings figures. Wages in particular will be meaningful as it reflects the missing piece of the monetary policy puzzle: inflation.

If the Dollar is to find its next leg higher or meaningfully lose ground to its counterparts, the true focus will turn to the ‘pace’ from the FOMC. Where this has been a common warning by policy officials for months, most speculators have obsesses over the timing of the first hike (likely making them eager to get it out of the way). Yet, after ‘liftoff’, projecting the second, third, fourth and so on increases will be more important for developing extended values. A number of Fed member discussions scheduled this week will likely help shape that forecast. Chairwoman Janet Yellen is set to testify between the Joint Economic Committee in Congress; but I’m more interested in Fed Brainard’s speech on neutral rates, Mester and Fischer’s talks on financial stability, Bullard’s remarks on the ‘new normal’ and Kocherlakota’s views on ‘renormalization’.

Reminding us that there are deeper currents to the market than just the Fed’s first move to normalize reminds us that eventually monetary policy will shift across the world. And, that time may be closer than investors are prepared for especially with the exceptional amount of risk they are balancing. That risk and the imminence of a retracted global central bank safety net will also bubble to the surface with other, major global event risk. Policy decisions by the ECB, RBA, BoC and RBI; GDP updates in the developed and developing world; and China’s SDR status are just a few major events that can give indirect USD influence and change the global financial system’s current.

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

DISCLOSURES