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.

Free Trading Guides
EUR/USD
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
GBP/USD
Bullish
USD/JPY
Mixed
Gold
Bullish
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • Canadian Dollar Price Forecast: USD/CAD Pullback from Key Resistance https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2019/11/18/canadian-dollar-price-forecast-usd-cad-usdcad-pullback-from-key-resistance-js55.html $USDCAD $CAD https://t.co/ej4Dc68AMD
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Silver: 0.13% Gold: 0.09% Oil - US Crude: -1.19% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/cELW1vxYBB
  • Heads Up:🇺🇸 USD NAHB Housing Market Index (NOV) due at 15:00 GMT (15min), Actual: N/A Expected: 71 Previous: 71 https://www.dailyfx.com/economic-calendar#2019-11-18
  • LIVE NOW: Join Senior Strategist @JWagnerFXTrader as he identifies current trading opportunities using several tools including Elliot Wave and support/resistance. Register here: https://www.dailyfx.com/webinars/963207267?CHID=9&QPID=917720
  • The latest US-China trade talk news seems to have had a negative impact on the Aussie as well, though $AUDUSD is still finding support at the 0.6800 handle so far https://t.co/iIq8dXWd8X
  • $USDCNH jumping as you'd expect https://t.co/Jxx1zAhTwk
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.07% US 500: -0.09% France 40: -0.49% Germany 30: -0.56% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/D7ld6wtiXN
  • Spooz coming under pressure as well headed into the NY open $ES_F https://t.co/2qUl8lreQc
  • Gold surging while Treasury yields plunging in response to latest US-China trade talk headlines sending a sour tone $XAUUSD $TNX $GLD #US10YR https://t.co/ruEsKggEAs
  • Sterling continues to price in the good news with $GBPUSD nearing 1.3000 and looking to test highs last seen in early May. Get your market update from @nickcawley1 here: https://t.co/5LGANmVyT7 https://t.co/HAFfl0wld2
US Dollar Caught Between Upbeat Fed, Skeptical Markets

US Dollar Caught Between Upbeat Fed, Skeptical Markets

2017-06-17 02:50:00
Ilya Spivak, Sr. Currency Strategist
Share:
US Dollar Caught Between Upbeat Fed, Skeptical Markets

Fundamental Forecast for the US Dollar: Neutral

  • US Dollar caught between upbeat FOMC, skeptical financial markets
  • Focus on Fed-speak may be supportive, PMI to test officials’ optimism
  • Volatility triggered by US political instability remains a potent risk

Want to discuss the market outlook with a DailyFX analyst? Sign up for a live webinar!

The US Dollar finds itself caught between a brazenly confident Federal Reserve and skeptical financial markets. The central bank has shrugged off a run of weak economic data and fizzling inflation, dismissing these setbacks as temporary and promising another rate hike before the year is out. Officials have also laid out plans to accelerate tightening by starting to scale down the bloated post-crisis balance sheet.

Investors have not resolved to overlook worrying news-flow as readily. Expectations priced into December Fed Funds futures show the markets expect the policy rate to remain within the current 100-125 basis point target range. Put another way, they expect that rate hikes are done for the year. Resolving this disparity one way or another will define the greenback’s near-term trend.

A thin offering of top-tier scheduled event risk leaves markets without an obvious catalyst to tip the scales for most of the coming week. The preliminary set of June PMI surveys is a standout, offering a timely test of the Fed’s confidence in the economic cycle, but it won’t cross the wires until Friday. That will leave it up to a steady stream of comments from Fed officials to set the tone, which may bode well for the US unit.

The influence of US political uncertainty risk remains an ever-present wildcard however. The investigation into possibly improper contact between Russian officials and the Trump campaign is probing higher up the food chain. Indeed, independent counsel Robert Mueller is reportedly investigating the President directly on potential obstruction of justice charges.

This means that whatever may be happening around financial markets, it is now a given that a bombshell revelation of some sort may emerge unannounced with drastic consequences. If market-wide risk appetite evaporates in such a scenario, the markets may well conclude that the Fed will be forced to the sidelines whether it likes it not, sending the Dollar lower.

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

DISCLOSURES

News & Analysis at your fingertips.