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
GBP/USD
Bullish
USD/JPY
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
Gold
Bullish
Oil - US Crude
Bullish
Bitcoin
Bearish
More View more
Real Time News
  • Heads Up:🇨🇳 CNY Foreign Direct Investment (YoY) (OCT) due at 07:00 GMT (15min), Actual: N/A Expected: N/A Previous: 3.8% https://www.dailyfx.com/economic-calendar#2019-11-18
  • #DidYouKnow the global trade volumes dropped by close to 10% amid the Great Recession. Want to know your #tradewars history? Get it here: https://t.co/f4loFVimeY https://t.co/dsm02kQo7T
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.72%, while traders in France 40 are at opposite extremes with 87.30%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/JPJaD7lqOJ
  • US Dollar ASEAN Ahead: IDR, MYR, Trade Talks, Bank of Indonesia #ASEAN #USD #tradewars - https://www.dailyfx.com/forex/fundamental/article/special_report/2019/11/18/US-Dollar-ASEAN-Ahead-IDR-MYR-Trade-Talks-Bank-of-Indonesia.html?CHID=9&QPID=917702 https://t.co/KdtdFBrePr
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.15% 🇪🇺EUR: 0.07% 🇨🇦CAD: 0.03% 🇯🇵JPY: -0.04% 🇳🇿NZD: -0.08% 🇦🇺AUD: -0.17% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/uZlNJOzt15
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: -0.04% Wall Street: -0.06% US 500: -0.06% France 40: -0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/MxO1wOfF99
  • Over the past 30 days, #ARS, #COP and the #MXN have been the best performing Latin American currencies vs. USD with 6.91%, 1.04% and 0.99% total returns.
  • #KRW, #PHP and the #JPY are expected to be the most active Asian currencies vs #USD with 1-week implied volatilities at 6.75, 4.92 and 4.60 respectively
  • The #JapaneseYen has posted some rare gains against the #USDollar on its daily chart, but important channel support still holds on an intraday basis. Keep a close eye on it now. https://www.dailyfx.com/forex/technical/home/analysis/usd-jpy/2019/11/18/Japanese-Yen-Gains-But-USDJPY-Up-Channel-Remains-Key.html?utm_source=Twitter&utm_medium=Cottle&utm_campaign=twr #USDJPY, #AUDJPY, #JPY
  • RT @FactSet: The forward 12-month P/E ratio for $SPX is 17.5, which is above the 5-year average (16.6) and the 10-year average (14.9). http…
Fed Hikes Rates as Expected - US Dollar Shrugs

Fed Hikes Rates as Expected - US Dollar Shrugs

2017-06-14 18:22:00
Christopher Vecchio, CFA, Sr. Currency Strategist
Share:

Talking Points:

- Federal Reserve raises rates for the second time this year.

- Fed 'dot plot' sees one more rate hike in 2017 and three overall in 2018.

- US Dollar fails to rally despite rate rise - looks like a 'dovish hike.'

In another highly telegraphed policy change, the Federal Reserve raised rates by 25-bps to 1.00-1.25%. Yet in what we consider to be a "dovish hike" (an oxymoron), the Fed has chosen to maintain its rate 'glide path' while cutting its outlook in its Summary of Economic Projections (SEPs)

Chart 1: Fed's Dot Plot - June 2017

Fed dot plot - June 2017

Even though the lack of change in the Fed's dot plot was perceived to be a bit more hawkish than anticipated, a review of the economic forecasts underscores why the US Dollar isn't producing any gains.

Chart 2: Fed's Revised Economic Projections - June 2017

Fed summary of economic projections - June 2017

While the Fed boosted its 2017 GDP forecast and lowered its 2017 Unemployment Rate forecast, it also reduced its 2017 inflation forecasts. The market may already be recognizing this as illogical: inflation is expected to remain below the Fed's medium-term target of +2%, but the environment will still warrant a third rate hike this year?

We'll be watching how the US yield curve moves around these developments and Fed Chair Yellen's press conference at 18:30 GMT: the US yield curve has been flattening, and if ST yields continue to rise and start to supercede LT yields, we'd be looking at a yield curve inversion. For the US, every recession in the post-war era has been preceded by an inverted yield curve. The 2s10s curve has flattened from 136-bps in December 2016 to 80-bps after the rate decision today.

Chart 3: DXY Index 1-minute Chart: June 14, 2017

DXY Index FOMC rate decision June 14, 2017

Around the FOMC meeting, the DXY Index traded in a whippy fashion, ultimately resolving itself only marginally higher initially. Overall on the day, the DXY Index remains down. Additional volatility should be anticipated as Fed Chair Yellen takes the mic at 14:30 EDT/18:30 GMT.

Read more: Preview for June FOMC Meeting and Outlook for USD-pairs

--- Written by Christopher Vecchio, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

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

DISCLOSURES

News & Analysis at your fingertips.