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
Oil - US Crude
More View more
Real Time News
  • The Australian Dollar and New Zealand Dollar tend to rise with stocks. They have recently fallen despite gains in the #SP500. What does this mean for $AUDUSD and $NZDUSD ahead? #AUD #NZD #RBA #RBNZ - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/01/17/AUDUSD-NZDUSD-Outlook-Looks-Past-Stocks-to-Rate-Cut-Bets.html?CHID=9&QPID=917702 https://t.co/ddf2fV7Kyl
  • A few snippets from today's commentary. Check out the link below for the full story (via @DailyFX). https://t.co/I31tuq764r https://t.co/x0BaiOFA1P
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/e2YrN3dBrl
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 98.00%, while traders in France 40 are at opposite extremes with 79.59%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/UL7hqSD2Ki
  • US Dollar Forecast: $USD Lacking Impetus Ahead of Consumer Sentiment #Forex traders shift focus away from US-China trade deal headlines - perhaps toward the monthly release of #ConsumerSentiment data for volatility and clues on the Greenback's next move https://www.dailyfx.com/forex/fundamental/us_dollar_index/usd_trading_today/2020/01/16/us-dollar-forecast-usd-lacking-impetus-ahead-of-consumer-sentiment.html
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.11% 🇦🇺AUD: -0.02% 🇯🇵JPY: -0.03% 🇨🇭CHF: -0.05% 🇬🇧GBP: -0.06% 🇨🇦CAD: -0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Kxcb9EtIWb
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.45% France 40: 0.26% Wall Street: 0.07% US 500: 0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/I5YIsKQAog
  • 🇯🇵 JPY Tertiary Industry Index (MoM) (NOV), Actual: 1.3% Expected: 1.0% Previous: -5.2% https://www.dailyfx.com/economic-calendar#2020-01-17
  • The $JPY has weakened as a bounce-back in risk appetite saps haven-asset demand. However, the old uptrend line still provides clear resistance. Get your market update from @DavidCottleFX HERE:https://t.co/IMhgQ9jbF9 https://t.co/I7087olftk
  • Heads Up:🇯🇵 JPY Tertiary Industry Index (MoM) (NOV) due at 04:30 GMT (15min), Actual: N/A Expected: 1.0% Previous: -4.6% https://www.dailyfx.com/economic-calendar#2020-01-17
USD Price Analysis: Risk of Deeper Losses as Fed Confirms U-Turn

USD Price Analysis: Risk of Deeper Losses as Fed Confirms U-Turn

2019-06-20 09:45:00
Justin McQueen, Analyst

USD Price Analysis and Talking Points:

  • Fed Delivers as U-Turn is Confirmed
  • ECB vs. Fed | Fed Have More Firepower
  • USD Technical Outlook | Key 200DMA Eyed

See our quarterly USD forecast to learn what will drive prices throughout Q2!

Fed Delivers as U-Turn is Confirmed

Yesterday, the Federal Reserve confirmed its U-Turn in monetary policy, delivering what the markets had wanted. The Federal Reserve dropped its guidance of “patient” and instead highlighted their “readiness to act in order to sustain the expansion”, thus opening the door to rate cuts. This was also reaffirmed by the dot-plot projection, which showed a sizeable shift with 8 members projecting a rate cut, 7 of which are looking for 50bps worth of easing. Chair Powell also noted that those who saw rates on hold, the case for a cut had strengthened. To add to this, Powell stated that the Fed could potentially bring its QT unwind to an end, earlier that previously stated. In reaction to the dovish signal from the Fed, the USD index had come under pressure across the board with US 10yr yields dipping below 2%, while US equities edged towards record highs.

As we highlighted at the beginning of the year, markets are indeed dictating monetary policy. (full analysis) In turn, this sees Gold in pole position to benefit. (full analysis) Of course, focus will turn towards the G20 summit and most importantly the talks between Trump and Xi.

USD Price Analysis: Risk of Deeper Losses as Fed Confirms U-Turn

Source: Refinitiv, DailyFX (Fed Rate Expectations)

ECB vs. Fed | Fed Have More Firepower

When it comes to easing monetary policy, the Fed have seemingly more firepower than the ECB, given that the latter is already in negative territory. Source reports earlier this week noted that the ECB would use rates as its first policy tool, as such, with all else being equal, the USD stands to weaken against the Euro with the Fed seen easing policy by almost 75bps, relative to the 13bps by the year-end. Consequently, the greater focus for ECB policy will be on whether they reintroduce QE for the Euro to materially weaken against the greenback.

USD Technical Outlook | Key 200DMA Eyed

The USD is now edging back to the pivotal 200DMA, previous attempts to make a closing break has failed. However, a firm move below puts the greenback at risk of further losses, opening a move towards the 96.00 handle.

US Dollar Index Price Chart: Daily Time Frame (Dec 18 – May 19)

USD Price Analysis: Risk of Deeper Losses as Fed Confirms U-Turn


--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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


News & Analysis at your fingertips.