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Forex: Dollar Hits Four-Month Highs Without a Risk Collapse

Forex: Dollar Hits Four-Month Highs Without a Risk Collapse

2014-01-16 01:50:00
John Kicklighter, Chief Strategist
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Talking Points:

• The USDollar has extended its recover as Taper speculation is reinforced

• Even the Fed's most dovish member is on board with QE reduction, and key CPI data is ahead

• With equities returning to record highs and volatility risks easing, monetary policy is our key driver

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Both the Dollar and S&P 500 marked impressive performances over the past trading session, and the progress suggests existing trends may soon revive larger trends. With the USDollar pushing to a four-month high and US equities nudging record highs, we are presented with a backdrop that materially disarms the high-potential - but low probability - in a market-wide deleverage in risk. That said, a refocus on monetary policy presents its own impressive trade scenarios. Of particular interest is the dollar under the pull of Taper and with the CPI data ahead. We look at risk trends and the dollar pairs in today's Forex Trading Video.

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