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
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
GBP/USD
Bearish
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Bullish
Bitcoin
Mixed
More View more
Real Time News
  • Gold Price: XAU/USD Key Chart Signals to end Consolidation- GLD Forecast More details in the link below: https://www.dailyfx.com/forex/technical/home/analysis/xau-usd/2019/12/16/Gold-Price-XAUUSD-Key-Signals-to-end-Consolidation--GLD-Forecast-MK.html?CHID=9&QPID=917714 https://t.co/WUxDroWEBk
  • Positive session so far for equities...#ftse #equities @IGcom https://t.co/m6WsAEBdfn
  • Tune in to @nickcawley1 's #webinar at 6:30 AM ET/11:30 AM GMT to prepare for key UK events and markets in the week ahead. Register here: https://t.co/xewSeUoDaT https://t.co/xV9JF9o763
  • What are a few of the common trading mistakes made by traders? Find out from @WVenketas here: https://t.co/Q3sPmP2rya #tradingstyle https://t.co/sSU5q2ObQm
  • Missed today's Cross-Market Weekly Outlook webinar? See the recording here: https://t.co/d1rb3hCZTH We discussed: - US-China #trade deal - #Brexit outlook after the UK general election - US #Dollar outlook going into 2020
  • European Opening Calls From IG: #FTSE 7392 +0.53% #DAX 13346 +0.48% #CAC 5955 +0.60% #AEX 607 +0.74% #MIB 23509 +0.77% #IBEX 9622 +0.61% #STOXX 3754 +0.61%
  • Traders should know how to confidently approach, enter and exit both Bull or Bear markets. Need some insight into it? Get it from @nickcawley1 here: https://t.co/GhvvFrB3gz https://t.co/IbzSBk5Hb1
  • Join @DavidCottleFX 's #webinar at 3:00 AM ET/8:00 AM GMT for your weekly update on the top Asia Pacific market drivers that traders should watch this week. Register here: https://t.co/HNf3Axw8s5 https://t.co/iMMiza1J1d
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/im72E4Szmi
  • The Riksbank – the world’s oldest central bank - will exit its negative interest rate policy for the first time in known history as officials explore uncharted territory with unknown consequences. https://www.dailyfx.com/forex/fundamental/article/special_report/2019/12/16/Worlds-Oldest-Central-Bank-to-Exit-Negative-Rate-Policy-First.html
US Dollar Ends Seven-Week Losing Streak. Now What?

US Dollar Ends Seven-Week Losing Streak. Now What?

2018-02-03 02:50:00
Ilya Spivak, Sr. Currency Strategist
Share:
US Dollar Ends Seven-Week Losing Streak. Now What?

Fundamental Forecast for the US Dollar: Neutral

  • US Dollar ends 7-week losing streak after impressive labor-market data
  • Improving service-sector ISM survey data might offer additional support
  • RBA, RBNZ and BOE rate decision outcomes likely to be trend-defining

Find out here how recent price moves have matched up with our first-quarter US Dollar forecast!

The US Dollar ended a seven-week losing streak – the longest in over 13 years – to post an advance against its major counterparts. A cautiously hawkish FOMC policy announcement helped cool selling pressure but the bulk of the advance came courtesy of a January’s impressively strong employment data.

The report showed the economy added 200k jobs last month, topping forecasts for a 180k increase. December’s result was also revised higher, pointing to a gain of 160k versus the 148k originally reported. Perhaps most importantly however, wage inflation unexpectedly jumped to 2.9 percent.

The greenback’s rally was tellingly accompanied by a rise in Treasury bond yields and a steepening of the priced-in 2018 rate hike implied in Fed Funds futures. That marks something of a return to form: the currency has been unable to capitalize on a hawkish shift in policy bets since early November.

More interestingly still, news of a stronger than expected US labor market – a seemingly supportive development for domestic and global growth – was accompanied by aggressive risk aversion. In fact, the benchmark S&P 500 stock index accelerated downward after the data crossed the wires.

Looking ahead, top tier domestic news flow will be dispensed with early in the week as the service-sector ISM survey cross the wires on Monday. A pickup in the pace of activity growth is projected. If the Dollar is recoupling with the Fed outlook in earnest, that has scope to give it a lift.

The bulk of the week will be spent looking abroad however, with rate decisions from the RBA, the RBNZ and the BOE taking top billing. No changes are expected but traders will be combing the accompanying policy statements for signs of a hawkish tone shift in officials’ forward guidance.

The US currency’s plunge over the past three months has mostly owed to speculation that a broadening pickup in global growth will see top central banks following the Fed’s hawkish lead, eroding its yield advantage. Last month, the BOC, BOJ and ECB all pushed back against this narrative.

If the trio of incoming policy announcements follow suit, the Dollar seems likely to continue higher. In fact, gains may be had not just against the currencies in question, with a broader-based recovery developing as the central thesis driving recent weakness losses its appeal to investors.

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

DISCLOSURES

News & Analysis at your fingertips.