Forex: Dollar Versus S&P 500 Next Week with FOMC on Tap
• The FOMC rate decision Wednesday tops a long list of event risk this coming week
• A record close for the S&P 500 and weak positioning for the dollar suggest a risk focus
• Still absent from the markets is conviction, which may signal a dangerous and untapped fear bias
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US employment figures left an impression of building risk trends to support equities and weigh the dollar. Yet, where was the momentum that reflects that optimism? There is a fog of uncertainty for growth and financial stability mixed with dangerous exposure in the speculative ranks. Abandoning all concern could accelerate a dollar collapse (best suited for USDJPY and AUDUSD), but the sensitivity to deleveraging is a risk far too real(opportunities for GBPUSD, EURUSD and others). Another countdown has started to a possible decisive catalyst for financial market trends: the FOMC rate decision on Wednesday. We discuss the event risk and trade options for the coming week in the Weekend Trading Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.