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
Bearish
Oil - US Crude
Mixed
Wall Street
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
Gold
Mixed
GBP/USD
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
USD/JPY
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
More View more
Real Time News
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/TwrOBFgIwj
  • Gold prices were crushed this week as yields continued to climb. But with a big spot of support coming in, can buyers bring a bounce ahead of NFP? Get your market update from @JStanleyFX here: https://t.co/E1TTXVJGUm https://t.co/pD4TeAY3ZP
  • Get your snapshot update of the of market open and closing times for each major trading hub around the globe here: https://t.co/BgZLFljIhZ https://t.co/PiLYJDVvtY
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/453MLny2lu
  • The haven-linked US Dollar may be in a position to benefit in the short-run as economic recovery bets support longer-dated Treasury yields, making them more competitive with stocks. Get your market update from @ddubrovskyFX here: https://t.co/BickxlcuZi https://t.co/OdARp4Z1mh
  • The Dow Jones and Nasdaq 100 look to be on diverging technical paths as volatility spikes. Meanwhile, the S&P 500 teeters on support as it splits the difference between its sister indices. Get your market update from @PeterHanksFX here: https://t.co/0gULgIN2kw https://t.co/dzuxyjkXmx
  • What's the difference between leading and lagging indicators? Find out from here: https://t.co/vGx8HCagF5 https://t.co/yTYG7ote3R
  • The reflation trade is helping to push the oil-linked Canadian Dollar higher as the post-Covid economic outlook clears. The Loonie is reliant on the global economy’s recovery. Get your market update from @FxWestwater here: https://t.co/CYUiH0PCca https://t.co/my6clW7pxY
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/q8Ds7wYrKA
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/qtAmyhFU9A
Dollar Declines as FOMC Minutes Point to Powell Pumping the Brakes on Hawkish Fed

Dollar Declines as FOMC Minutes Point to Powell Pumping the Brakes on Hawkish Fed

Richard Dvorak,

Talking Points:

  • Federal Reserve Chairman Jerome Powell Pivots on Hawkish Narrative to Dovish Outlook
  • Dollar Dips in Anticipation of Fewer Future Rate Hikes
  • US Equities Rally on the Prospect of Lower Interest Rates

Minutes released by the Federal Reserve's FOMC today covering its November 7-8 meeting revealed that the central bank looks to stay on course for its fourth rate hike this year at the conclusion of its next meeting on December 19. The FOMC minutes, which detail the central bank’s internal deliberations over managing its dual mandate of maintaining stable prices and low unemployment, addressed the Fed’s current reading on the health of the US economy and its future outlook. The release detailed “almost all participants expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon.”

The report implied that the Fed intends to stand pat on its position to raise the target federal funds rate an additional 25 basis points from the current range of 2.00-2.25 percent seeing that “the labor market had continued to strengthen and that economic activity had been rising at a strong rate.” However, the future path for policy normalization has grown increasingly uncertain. The minutes allude to the recent shift in the Fed’s narrative for “slow-and-steady” increases in the Fed’s policy rate to a less hawkish stance as Jerome Powell, Chairman of the Federal Reserve, states the central bank is not on a “preset policy path.”

Concerns were voiced over the adverse impact from tariffs in addition to deteriorating credit fundamentals, which follows other risks pointed out in the Fed’s Financial Stability Report (FSR) published yesterday. Additionally, Chairman Powell’s stated after the FSR release that rates are “just below” the range of the neutral rate of interest, estimated at 2.5-3.5 percent. The sudden dovish pivot by the head central banker compares to his comments after the FOMC meeting a month ago where Powell viewed rates “probably still a long way” from the neutral rate of interest.

The Fed minutes also pointed to signs of global growth slowing as well as the dying tailwind of fiscal stimulus from tax cuts and federal spending all posing downside risk to the economy. However, the minutes note that FOMC participants “suggested that some of these financial vulnerabilities might not currently represent risks to financial stability so much as they represent downside risk to the economic outlook.”

Following the release of the minutes, the dollar began to extend its slide further from yesterday’s drop as markets start to price lower interest rates ahead.

US Dollar DXY Price Chart

As for US equities, investors appear pleased by the Fed’s move towards a less hawkish approach to normalization with the S&P500 up over 2 percent since Powell spoke at the New York Economic Council following the FSR release.

S&P500 SPX Price Chart

But, the move could prove short lived if a complacent market is caught off guard by further gradual tightening next year. Given the recent move higher across the major stock indices as markets now expect fewer hikes in the future, the probability of a lower interest rate trajectory in 2019 appears overestimated considering the Fed is still 4 hikes below the midpoint of its current estimate for the neutral rate of interest.

For more information on DXY and SPX sentiment click here

--Written by Rich Dvorak, Junior Analyst for DailyFX.com

--Follow on Twitter @RichDvorakFX

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

DISCLOSURES