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.

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
More View more
Real Time News
  • The US Dollar slipped last week after the Federal Reserve calmed taper timeline talks. Friday’s non-farm payrolls figure may rekindle upside USD bets if it impressive. Get your weekly USD forecast from @FxWestwater here: https://t.co/4KDanAA0Q1 https://t.co/ZZWpIZlZBo
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/J0F9xIw2I0
  • The Nasdaq 100 and Russell 2000 find themselves with significantly different technical formations but traders may find cause for optimism in both indices. Get your weekly equities technical forecast from @PeterHanksFX here: https://t.co/22fvav620W https://t.co/ajXEhMQhUp
  • 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/wRwHXFbbBW
  • 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/ZWwGB8J6I7
  • Ethereum is starting to outperform Bitcoin again ahead of ETH’s latest upgrade, while Binance continues to pare back business areas amid ongoing regulatory pressure. Get your crypto forecast from @nickcawley1 here: https://t.co/ul4TIfI9bv https://t.co/Ht5Mr0uu91
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9Flsqcxo9 https://t.co/m06h4hjwVP
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/LcfxFxFrTY
  • Forex sentiment analysis can be a useful tool to help traders understand and act on price behavior. Learn how to get the most out of understanding trader sentiment here: https://t.co/rJznrXkcYz https://t.co/UgYlEILK5n
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/BXp2z6E0Kl
US Dollar, S&P 500 Overlook FOMC Rate Decision as Election Drags

US Dollar, S&P 500 Overlook FOMC Rate Decision as Election Drags

Rich Dvorak, Analyst

US DOLLAR, S&P 500 UNFAZED BY FOMC DECISION IN LINE WITH EXPECTATIONS

  • FOMC leaves policy interest rate and pace of asset purchases unchanged as widely expected
  • US Dollar facing heavy selling pressure, S&P 500 soaring on prospective Biden Presidency
  • Market volatility could quickly resurface if coronavirus concerns come back into the spotlight

The Federal Reserve just announced its latest interest rate decision. FOMC officials unanimously voted to leave the target Federal funds rate range unchanged at 0.00-0.25% and continue expanding its balance sheet at the current pace. This was widely expected with the US central bank likely opting to stay sidelined this meeting in light of the November 2020 election.

US DOLLAR INDEX PRICE CHART: 4-HOUR TIME FRAME (20 OCT TO 05 NOV 2020)

US Dollar Index Price Chart November 2020 FOMC Decision

Chart by @RichDvorakFX created using TradingView

The broad-based US Dollar Index moved little in response to the latest FOMC decision. Over the last few hours, however, USD price action has plunged amid election-driven volatility. The DXY Index now trades about 1.6% lower month-to-date and is probing technical support provided by October swing lows near the 92.60-price level. Growing prospects for a Biden presidency stands out as the primary catalyst for recent US Dollar weakness.

S&P 500 INDEX PRICE CHART: 2-HOUR TIME FRAME (28 OCT TO 05 NOV 2020)

S&P 500 Index Price Chart November 2020 FOMC Decision

Chart by @RichDvorakFX created using TradingView

The S&P 500 similarly changed little in the wake of the Federal Reserve statement. Stocks have been soaring and seemingly defying gravity as the mix of a Biden presidency and split congress could downplay risks of higher taxes. That said, the move higher in risk assets and selloff across safe-haven currencies seems a touch overdone at this point.

President Trump continues to file lawsuits against states in an attempt to contest election results across key battleground states. If there is merit to these lawsuits and the final election result is dragged out further, investors could grow uneasy and send the VIX ‘fear-gauge’ snapping back higher. Nonetheless, two court judges in Georgia and Michigan have just separately dismissed Trump lawsuits regarding potential voter fraud due to lacking evidence.

Looking beyond the election, the threat of mounting coronavirus concerns across the US again stands out as a major headwind to the economy and risk appetite. The Fed press statement highlighted once again how the path of the economy depends significantly on the course of the pandemic.

On that note, with other global central banks ramping up their pace of asset purchases recently, there could be potential for the Fed to expand its QE program down the road at the December FOMC meeting. Also, considering the little chance for a democratic sweep now, hopes for a massive stimulus package may dwindle and the burden of providing much-needed economic support could fall back on the Fed’s shoulders.

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

Connect with @RichDvorakFX on Twitter for real-time market insight

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

DISCLOSURES