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.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • Believe it or not, some stocks may actually be more attractive in a bear market. Learn more about Defensive stocks here:
  • Further your forex knowledge and gain insights from our expert analysts @JohnKicklighter and @JStanleyFX on $USD with our free Q4 market analysis guide, available for free today. #DailyFXGuides
  • Stocks looked poised to rally with risk sentiment generally strong and technical signposts supportive of higher levels. Get your weekly equities forecast from @PaulRobinsonFX here:
  • Volatility, volatility, volatility. It's talked about so often but how can a trader really incorporate this into their approach? Find out here:
  • Markets move in cycles, and stocks do too, with certain sectors carrying more attraction in various backdrops. Learn more here:
  • Bitcoin broke above $60k earlier in the session to a fresh multi-month high on the renewed expectation that the SEC will approve a futures-based Bitcoin ETF very soon. Get your weekly #Bitcoin forecast from @nickcawley1 here:
  • Further your stock trading knowledge and gain informed market analyses from our expert analysts @HathornSabin and @JMcQueenFX on Indexes with our free Q4 guide, available today. #Dailyfxguides
  • Get your basics right. Find out what is stock market volatility and how you can trade It here:
  • The Japanese Yen continues to be pummeled against most major currencies. Get your weekly Japanese Yen forecast from @HathornSabin here:
  • The US Dollar paused its advance against ASEAN currencies. USD/SGD eyes a key trendline, USD/THB risks stalling, USD/PHP enters consolidation as USD/IDR continues ranging. Get your market update from @ddubrovskyFX here:
USD Poised to Outperform on Fed Policy, JPY Correction Ahead

USD Poised to Outperform on Fed Policy, JPY Correction Ahead

David Song, Strategist





Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index






Forex_USD_Poised_to_Outperform_on_Fed_Policy_JPY_Correction_Ahead_body_ScreenShot263.png, USD Poised to Outperform on Fed Policy, JPY Correction Ahead

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) gained another 0.26 percent as the deepening recession in Europe increased the appeal of the reserve currency, and the dollar should appreciate further over the near to medium-term as the fundamental developments coming out of the world’s largest economy points to a more broad-based recovery in the U.S. However, we’re getting a bit cautious here as the 30-minute relative strength index falls back from overbought territory, and we may see the pullback from the yearly high (10,343) turn into a larger correction as the index appears to be carving out a head-and-shoulders top on a shorter-term scale. Nevertheless, we will preserve our bullish outlook for the greenback as positive developments coming out of the U.S. economy encourages the Federal Reserve to adopt a more hawkish tone for monetary policy, and we should see the central bank slowly move away from its easing cycle this year as the outlook for growth and inflation picks up.

Forex_USD_Poised_to_Outperform_on_Fed_Policy_JPY_Correction_Ahead_body_ScreenShot264.png, USD Poised to Outperform on Fed Policy, JPY Correction Ahead

Although we still have FOMC board members James Bullard and Sandra Pianalto scheduled to speak over the next 24-hours of trading, we may see market volatility taper off going into the G20 meeting in Moscow as the group of finance ministers and central bank governors pledge to refrain from competitive devotion. Indeed, the G20 said they’re committed to reducing global imbalances as the world economy remains fragile, and went onto say that the group would be ‘mindful of possible monetary policy spillover’ as central banks across the global continue to embark on their easing cycle. However, as the FOMC scales back its willingness to expand the balance sheet further, the deviation in the policy outlook should prop up the dollar going forward, and we should see the upward trend continue to take shape in 2013 as we anticipate the Fed to start discussing a tentative exit strategy later this year.

Forex_USD_Poised_to_Outperform_on_Fed_Policy_JPY_Correction_Ahead_body_ScreenShot265.png, USD Poised to Outperform on Fed Policy, JPY Correction Ahead

Three of the four components weakened against the greenback, led by a 0.87 percent decline in the Euro, while the Japanese Yen bucked the trend and rallied 0.40 percent against its U.S. counterpart as the Bank of Japan (BoJ) maintained its current policy this month. Although the BoJ pledged to do more to quickly achieve the 1 percent target for inflation, the central bank may stick to the sidelines for the time being as the world’s third largest economy appears to have stopped weakening. However, as Governor Masaaki Shirakawa is set to leave the helm in March, we may see the new government continue to threaten the central bank’s independence, and the Japanese Yen remains poised to face additional headwinds over the course of the year amid the push to stem the risk for deflation. Nevertheless, the short-term pullback in the USDJPY should turn into a larger correction once the relative strength index breaks support (60), but we will preserve our bearish outlook for the Yen as the BoJ maintains a highly dovish tone for monetary policy.

--- Written by David Song, Currency Analyst

To contact David, e-mail Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

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