Video: Dollar and Aussie Dollar Rally on Monetary Policy Updates
• Another hawkish voice was sounded from the Fed as Dennis Lockhart suggested a September hike is the base case
• Simply holding back on rates and a bearish view of the currency, the RBA inadvertently rallied the AUD
• Risk trends are still a coiled spring which represents the greatest risk and greatest opportunity
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Speculation surrounding monetary policy bearings continues to generate a disproportionate amount of volatility in the FX market. There are bigger and more ominous events scheduled for later this week, but the docket this past 24 hours offered a surprising level of activity. For the Greenback, Atlanta Fed President Dennis Lockhart added a more distinct tone to the hawkish lean the FOMC has otherwise insinuated at previous policy meetings. His seeming belief that a September hike is a base case roused the USDollar but didn't supply enough buoyancy to clear three-month range resistance. Meanwhile, the RBA's neutral view on policy and the currency translated into a distinct rally for the Aussie Dollar. Will this last? We check in on monetary policy as a driver as well as looming risk trends in today's Trading Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.