Talking Points:
• Upgraded rate forecasts from the Fed boost the dollar but leave capital markets clinging to complacency
• The Scottish Referendum and ECB's Targeted LTRO allotment threaten volatility for the Pound, Euro
• Aside from top headlines, traders should watch volatility and reactions to stimulus changes (like the SNB)
Want to develop a more in-depth knowledge on the market and strategies? Check out the DailyFX Trading Guides we have produced on a range of topics.
Though the Fed disarmed the impact of its policy decision and forecasts on capital market complacency, the US Dollar extended its rally to 14-month highs. The difference between the currency's response and a benchmark like the S&P 500 is the scale of speculative positioning. In a low rate environment and with FX volatility significantly higher these past few weeks, upgraded rate forecasts from the central bank find better purchase. While keeping an eye on broader risk trends, we move on to the next high profile releases: the ECB's allotment of its first liquidity in years (TLTRO) and Scotland's vote for independence from the United Kingdom. We discuss the market bearings through the big picture and impending event risk in today's Trading Video.
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