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
Mixed
USD/JPY
Bullish
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • (Asia Pacific AM Briefing) AUD/USD Downtrend Held, Yen Up. US-China Trade Deal Optimism Faded $AUDUSD $USDJPY - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2019/10/14/AUDUSD-Downtrend-Held-Yen-Up-US-China-Trade-Deal-Optimism-Faded.html?CHID=9&QPID=917702 https://t.co/jJPPKvDHdy
  • The $AUD could be at risk of reversing gains recorded so far this month if the recent ‘phase 1’ US-China trade agreement fails to be finalized. Get your market update from @RichDvorakFX here: https://t.co/uKq0SepxRG https://t.co/sJJSFKXjjn
  • The $SPX's range Monday was the second smallest in the past year. That wouldn't be particularly unusual if it weren't for the supposed break through in the US-China trade war the previous active trading day (Friday)... https://t.co/dUnaRCZufd
  • Some of top event risk over the next 24hrs are: Eurozone ZEW Survey (Economic Sentiment) for October [9:00 GMT], German ZEW Survey Expectations for October [9:00], and New Zealand’s YoY Consumer Price Index [21:45] #NZD #Eurozone
  • The $SGD is driven by the Monetary Authority of Singapore, which manages exchange rate instead of short-term interest rates. Learn more on the $SGD and how to trade it from @ddubrovskyFX here: https://t.co/eWLM9XZs5Y https://t.co/PyWV2maVHY
  • RT @bbands: If you are based in Chicago, I'll be joining @IG_US on October 28th for a talk on applications of Bollinger Bands in forex. Com…
  • As expected, sentiment couldn't find much follow-through after the conclusion of US-China Phase 1 talks last week. The MSCI #EmergingMarkets Index is off to an eerie familiar decline saw after the US-China #G20 trade truce back in June - https://t.co/fTs63TY1LB https://t.co/revJYXI2HX
  • List of countries engaged in a trade war (or may be entering a trade tiff) US-EU 🇺🇸🇪🇺 US-China🇺🇸🇨🇳 India-Brazil🇮🇳🇧🇷 Malaysia-India🇲🇾🇮🇳 South Korea-Japan🇰🇷🇯🇵
  • List of countries engaged in a trade war (or are may enter a trade tiff) US-EU 🇺🇸🇪🇺 US-China🇺🇸🇨🇳 India-Brazil🇮🇳🇧🇷 Malaysia-India🇲🇾🇮🇳 South Korea-Japan🇰🇷🇯🇵
  • With increasing volatility in weather patterns, how might storms, hurricanes, and floods rattle the supply chain for petroleum-based products and impact crude #oil prices? Find out from @ZabelinDimitri here: https://t.co/e91RRyBQ3z #OOTT https://t.co/6QHLYqPz7B
US Dollar Gains on Market Turmoil, Eyes Bond Sales and TIC Data

US Dollar Gains on Market Turmoil, Eyes Bond Sales and TIC Data

2018-08-11 00:48:00
Ilya Spivak, Sr. Currency Strategist
Share:
US Dollar Price Chart

FUNDAMENTAL FORECAST FOR THE US DOLLAR: BULLISH

  • US Dollar soars as emerging market turmoil stokes haven demand
  • Bond auction results and TIC data may cap yields, cooling the rally
  • Sentiment boost from US/Japan autos deal may not prove lasting

See the latest US Dollar forecast learn what will drive prices in the third quarter!

The US Dollar would not let a lull in local data flow slow upward progress last week, finding a catalyst in deteriorating risk appetite across financial markets. While the benchmark unit’s unrivaled liquidity was expected boost its haven appeal, the simmering US/China trade war was thought to be the likely culprit souring investors’ mood. As it happened, a meltdown in emerging market assets driven by turmoil in Turkey and Russia was the trigger, pushing the greenback to a 14-month high.

The week ahead offers an eclectic mix of would-be stimuli for continued volatility. Retail sales and consumer confidence data will inform Fed policy bets, but it would take an improbably dramatic deviation from forecasts to dislodge status quo expectations. The Economic Symposium in Jackson Hole, Wyoming later this month is likely to be the next real inflection point in the narrative. For now, markets have fully priced in another hike in September and peg the probability of a further increase in December at close to 60 percent.

Elsewhere on the docket, results from a series of bond auctions may generate attention. The markets have been concerned about the growth-negative implications of a spike in borrowing costs as the Treasury seeks to finance a yawning deficit amplified by a $1.5 trillion tax cut and $300 billion in increased spending championed by the Trump administration. The Dollar suffered as yields ticked down after demand was impressively stable at a record-setting 10-year note sale last week.

June’s TIC capital flow data will be similarly interesting. Net foreign purchases of US securities have risen alongside bond yields in the past two years, suggesting higher returns are attracting demand. That might bode well for uptake as the Treasury steps up debt issuance. Data showing more of the same might be supportive for the greenback considering the Fed’s hawkish lead in the G10 space. To the extent that this keeps a lid on borrowing costs however, it may yet be interpreted as limiting scope for appreciation.

Needless to say, turmoil around the broader markets remains an important consideration. US tensions with Iran, Turkey and Russia remain unresolved. Trade war concerns continue to escalate as Washington and Beijing hike tariffs on each other. An accord avoiding auto import tariffs on Japan seems likely. Such a result will probably offer a bit of a respite from risk aversion but the overall landscape seems too treacherous to conclude that this will be sufficient for a lasting ‘risk-on’ shift in sentiment.

FX TRADING RESOURCES

--- Written by Ilya Spivak, Sr. Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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

DISCLOSURES

News & Analysis at your fingertips.