Forex Strategy Video: Dollar Traders Start to Weigh in First Fed Hike
• A Fed study suggests the market is pricing in a 50-50 chance of a FOMC hike by March 2015
• While the central bank's hike is no doubt some time off, the timing is a key fundamental driver
• Fed Chair Janet Yellen will help shape forecasts for timing with her Congressional testimony Tuesday
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If the market came to believe the Fed would delivery its first rate hike by late 2014 rather than mid-2015, the dollar would surge higher. For many, a fundamental development so far in the future seems an impossible market mover; but the forward-looking nature of the FX market makes such concerns major drivers well before they are confirmed and realized. The British pound is a good example of the power that interest rate forecasts can have. So, where does the market stand on rate forecasts for the and what will change this important theme? We discuss that in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.