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
Mixed
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Bullish
GBP/USD
Bearish
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
  • OPEC+ has oil production rollover among options for the OPEC meeting with several OPEC+ members supporting the idea of unchanged output in April - according the sources #OOTT
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/ZSURdwblqy
  • Heads Up:🇬🇧 Markit/CIPS Composite PMI Final (FEB) due at 09:30 GMT (15min) Expected: 49.8 Previous: 41.2 https://www.dailyfx.com/economic-calendar#2021-03-03
  • Heads Up:🇬🇧 Markit/CIPS UK Services PMI Final (FEB) due at 09:30 GMT (15min) Expected: 49.7 Previous: 39.5 https://www.dailyfx.com/economic-calendar#2021-03-03
  • 🇮🇹 GDP Growth Rate QoQ Final (Q4) Actual: -1.9% Expected: -2% Previous: 16% https://www.dailyfx.com/economic-calendar#2021-03-03
  • 🇮🇹 GDP Growth Rate QoQ Final (Q4) Actual: -1.9% Expected: -2% Previous: 15.9% https://www.dailyfx.com/economic-calendar#2021-03-03
  • 🇮🇹 GDP Growth Rate YoY Final (Q4) Actual: -6.6% Expected: -6.6% Previous: -5% https://www.dailyfx.com/economic-calendar#2021-03-03
  • 💶 Markit Composite PMI Final (FEB) Actual: 48.8 Expected: 48.1 Previous: 47.8 https://www.dailyfx.com/economic-calendar#2021-03-03
  • FTSE 250 - interesting to see if this breaks the multi-year high post-Budget. #budget #ftse @DailyFX Chart & price via @IGcom https://t.co/VMV1mehgN9
  • 🇩🇪 Markit Composite PMI Final (FEB) Actual: 51.1 Expected: 51.3 Previous: 50.8 https://www.dailyfx.com/economic-calendar#2021-03-03
Fed Fuels Gold & Currency Volatility Shockwave as USD Drops

Fed Fuels Gold & Currency Volatility Shockwave as USD Drops

Rich Dvorak, Analyst

VOLATILITY IN USD AND GOLD PROPELLED BY FED – TALKING POINTS

The US Dollar sunk across the board on Thursday following yesterday’s June Fed meeting which revealed the central bank’s most recent take on monetary policy and economic outlook. Chair Powell and the FOMC communicated a looming pivot in policy from neutral to dovish after stating that the Federal Reserve “will act as appropriate to sustain the expansion.” Together with plunging US treasury yields, the greenback has tumbled lower owing to the updated language that included downward revisions to the Fed dot plot and inflation outlook.

US DOLLAR (DXY) AND CURRENCY VOLATILITY (FXVIX) (INVERSE) – CHART 1: DAILY TIME FRAME (APRIL 18, 2018 TO JUNE 20, 2019)

DXY US Dollar Index Price Chart and Currency Volatility Technical Analysis

That being said, weakness in the US Dollar threatens to continue. The sharp move to the downside in the DXY US Dollar Index has been matched by a spike in currency volatility – or FXVIX – as measured by an equally weighed index of Cboe’s 30-day implied volatility readings on the Euro, Pound Sterling, and Japanese Yen. As markets digest the Fed’s capitulation to the lofty interest rate cut expectations currently priced in, traders may see climbing currency volatility exacerbate USD downside which is suggested by the historical relationship and recent negative correlation between USD and FXVIX.

SPOT GOLD (XAUUSD) AND GOLD VOLATILITY (GVZ) – CHART 2: DAILY TIME FRAME (APRIL 18, 2018 TO JUNE 20, 2019)

XAUUSD Price Chart and Spot Gold Volatility GVZ

Unsurprisingly, the topside gold price breakout has mirrored the collapse in interest rates and US Dollar depreciation. With XAUUSD now comfortably above technical resistance aligning with upbeat fundamentals, evidence of additional upside in spot gold appears to be hinted at by the explosion in gold price volatility (GVZ). In fact, XAUUSD just notched its highest close since September 2013 as GVZ skyrocketed to its highest level since April 2017. If US Treasury yields remain under pressure along with the dollar, spot gold’s advance risks accelerating as bullish sentiment mounts and pushes GVZ higher.

- Written by Rich Dvorak, Junior Analyst for DailyFX

- Follow @RichDvorakFX on Twitter

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

DISCLOSURES