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
  • EUR/USD attempts to halt a five day decline as the Federal Reserve sticks to the sidelines. Get your market update from @DavidJSong here:
  • US Markit Composite PMI for September fell to 54.5 from 55.4, whereby the services and manufacturing figures fell to 54.4 and 60.5 respectively, both missing analyst estimates. Get your market update from @JMcQueenFX here:
  • S&P 500, Nasdaq Rally After the Fed; 10 Year Yield to Two-Month-Highs
  • #Bitcoin Outlook: $BTCUSD Bounce From 40K, Fake-out or Shake-out? -
  • While JPY gets clobbered, CHF decides to turn a blind eye to yields $CHF
  • The surprise 100 basis point cut from the Turkish central bank (to 18%) generated the expected pressure for $USDTRY. That said, I don't think it was the market that decided the momentum should die out at 8.8000 again...
  • surprised that $NQ is holding up so well with what rates are doing. 10 year yield at a 2 month high, $Nasdaq still holding resistance at prior support
  • The S&P 500 has recovered all the ground it lost at the start of the week and the Dollar has slumped post FOMC and PMIs. DailyFX's @JohnKicklighter gives a brief overview of the market for Thursday!
  • The future taper isn't enough to urge the Dollar to a critical bullish break. In turn, $EURUSD has reversed shy of of August's trough and keeps in play an inverse head-and-shoulders pattern with a neckline at 1.19
USD Underpinned by Month-End Signals, However, Fed's Powell Poses Risk

USD Underpinned by Month-End Signals, However, Fed's Powell Poses Risk

Justin McQueen, Strategist

USD Analysis and Talking Points

  • Month-End Rebalancing to Underpin USD
  • Federal Reserve Balance Sheet Unwind to Spur USD Bid
  • Fed’s Powell Poses Near-Term Risk

See our Brand New Q4 FX forecast to learn what will drive major currencies throughout the quarter.

Month-End Rebalancing to Underpin USD

As we approach the month-end, eyes will be on the typical rebalancing that takes place. As it stands, investment bank rebalancing models from Citi and Barclays suggest that signals are for USD buying against its major counterparts with the strongest USD buy signal against JPY. Consequently, month-end demand may underpin the US Dollar over the next few sessions.

Federal Reserve Balance Sheet Unwind to Spur USD Bid

Friday will mark the next redemption day in which the shrinking of the Federal Reserve balance sheet will lead to a net impact on US liquidity of -$12.9bln. Typically, a large negative impact on USD liquidity will see the US Dollar gain against its major counterparts, while risk sentiment dips. Based on the past 5 SOMA redemption days, long USD has been a good proposition, given that these days have on average coincided with the Dollar index moving higher by 0.2% with a hit ratio above 70%.

Fed’s Powell Poses Near-Term Risk

Arguably the most important factor for the US Dollar today will be comments from Fed Chair Powell. Recently the Chair had dented the Dollar having provided a rather cautious outlook, whereby he stated that while the US economy is strong, the US could face headwinds going into next year regarding slowing demand and fading fiscal stimulus. Given that not an awful lot has changed since these comments, it is unlikely that the Chair will deviate too much away from this view. However, much like Vice Chair Clarida did yesterday, the Fed Chair will likely persist on highlighting that gradual rate hikes will continue (despite President Trump’s displeasure with higher interest rates) and that the Fed will be “data dependent”.

US Dollar Price Chart: Daily Time Frame (Nov 2016 -Nov 2018)

USD Underpinned by Month-End Signals, However, Fed's Powell Poses Risk

The USD remains in the rising channel, signalling further upside. Consequently, the USD is looking to make a test of the November 12th high (97.16). A break above opens up room for a move towards 97.75, which marks the 61.8% Fibonacci retracement of the 2017 high to 2018 low.


--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at

Follow Justin on Twitter @JMcQueenFX

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