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.

0

Notifications

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

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bearish
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
Wall Street
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
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Heads Up:🇬🇧 Construction PMI (APR) due at 08:30 GMT (15min) Expected: 62.3 Previous: 61.7 https://www.dailyfx.com/economic-calendar#2021-05-07
  • 🇮🇹 Retail Sales MoM (MAR) Actual: -0.1% Previous: 6.6% https://www.dailyfx.com/economic-calendar#2021-05-07
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 87.30%, while traders in Wall Street are at opposite extremes with 79.27%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/VZ9AbYGY0C
  • Heads Up:🇮🇹 Retail Sales MoM (MAR) due at 08:00 GMT (15min) Previous: 6.6% https://www.dailyfx.com/economic-calendar#2021-05-07
  • Commodities Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Gold: 0.25% Oil - US Crude: 0.21% Silver: 0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/DGtzbHsIac
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/cC80QLzTNk
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.26% 🇨🇭CHF: 0.17% 🇪🇺EUR: 0.14% 🇳🇿NZD: -0.07% 🇦🇺AUD: -0.10% 🇨🇦CAD: -0.16% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/NIonmU6Z9P
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.98% France 40: 0.80% FTSE 100: 0.61% Wall Street: 0.09% US 500: 0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/CehidrXOWz
  • 🇫🇷 Industrial Production MoM (MAR) Actual: 0.8% Expected: 2% Previous: -4.8% https://www.dailyfx.com/economic-calendar#2021-05-07
  • 🇫🇷 Balance of Trade (MAR) Actual: €-6.1B Previous: €-5.1B https://www.dailyfx.com/economic-calendar#2021-05-07
US Dollar Falls as FOMC Holds Rates, Raises Concern Over Low Inflation

US Dollar Falls as FOMC Holds Rates, Raises Concern Over Low Inflation

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- FOMC keeps rates unchanged as expected; Fed funds were pricing a 0% chance of a hike today.

- Fed’s July policy statement suggests that balance sheet unwind will start “relatively soon,” a change in language from “later this year” in the June statement.

- Concerns about inflation remaining “somewhat below” 2% in the near-term seem to be the focus for markets, which has been seen as a dovish blush; the US Dollar is down.

The Federal Open Market Committee shocked no one today when they announced they would hold the main overnight benchmark rate into a range of 1.00-1.25%, as was priced into the market well in advance of today’s policy meeting. Ahead of the decision, Fed funds futures were implying a 0% chance of a rate move today. After all, it was an ‘off-cycle’ meeting in which no new summary of economic projections (SEPs) were released nor was there a press conference by Fed Chair Janet Yellen.

Unfortunately for the beleaguered US Dollar, the FOMC’s July policy statement wasn’t hawkish enough to stem recent bleeding. While the Fed did say that risks to the economic outlook appear “roughly balanced,” they also noted that inflation is expected to stay “somewhat below” 2% in the near-term.

Accordingly, despite the fact that the FOMC also noted that the balance sheet unwind will start “relatively soon,” a change in language from “later this year” in the June statement, the policy statement contained too much concern over inflation to spark US Dollar strength.

After the Fed’s policy decision, the market-implied glide path of interest rates remained little changed. Ahead of the rate decision, markets were pricing in a 60% chance of a 25-bps in March 2018; after, markets were pricing in a 55% chance of a hike in March 2018.

See the DailyFX economic calendar for Wednesday, July 26, 2017

Chart 1: DXY Index 1-minute Chart (July 26, 2017 Intraday)

US Dollar Falls as FOMC Holds Rates, Raises Concern Over Low Inflation

Following the rate decision, the US Dollar slipped back versus the Euro and the Japanese Yen, with the Dollar Index (DXY) falling from 94.08 ahead of the FOMC decision to as low as 93.68. DXY Index was trading at 93.75 at the time this report was written.

Read more: Preview for July FOMC Decision & Outlook for USD-pairs, JPY-crosses

--- 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