Tag Archives: markets

US Dollar Slow To Respond to Risk Trends, Fed Keeping it Back?

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US Dollar Slow To Respond to Risk Trends, Fed Keeping it Back?US Dollar Slow To Respond to Risk Trends, Fed Keeping it Back?

Fundamental Forecast for Dollar: Bullish

  • Debate over the timing of the Fed’s next rate hike was drowned out by China, commodities and capital markets’ plunge
  • While risk aversion is broadening, the Dollar has yet to show it is serious about resuscitating its haven appeal
  • What are the Traits of Successful Traders? See what our studies have found to be the most common pitfalls of retail FX traders.

The Dollar still carries the glow of last month’s Fed hike and there is a new – and traditionally favorable – wind blowing in the currency’s favor: risk aversion. Yet despite, the encouraging fundamental circumstances, the Greenback is showing little of the drive it had enjoyed the past few years. The equally-weighted USDollar Index has inched up to a 12-year high while the trade-weighted ICE Dollar Index is virtually unchanged. Drives for commodity-currency based majors (USDCAD, AUDUSD, NZDUSD) and the tumble in the Cable (GBPUSD) seem to have more to do with counterparts than the Dollar itself. EURUSD, the world’s most liquid currency pair, perhaps best reflects the situation with a minor anti-dollar close week-over-week. read more

Watch China, Milk for Kiwi Cues

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Watch China, Milk for Kiwi CuesWatch China, Milk for Kiwi Cues

Fundamental Forecast for the Kiwi: Bearish

The New Zealand Dollar continues to display a tight relationship with the bigger overall macro-theme of China and the larger overall threat of an Asian slowdown. Since China began their most recent descent on the heels of the December rate hike out of the Federal Reserve, the Kiwi hasn’t held up well at all. Eleven of the past twelve days have seen the Kiwi trade lower against the greenback (for a total move of -6.3%), and if we match it up with the Yen, it’s even worse – with the same 11 of 12 tally but an even larger move lower; with a full -8.45% lost against the Yen over that 12-day sequence. read more

Gold Down But Not Out as Risk Sell-off Persists- 1072 Support

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Gold Down But Not Out as Risk Sell-off Persists- 1072 SupportGold Down But Not Out as Risk Sell-off Persists- 1072 Support

Fundamental Forecast for Gold: Bullish

Gold prices retreated this week with the precious metal off by more than 1% to trade at 1090 ahead of the New York close on Friday. The pullback comes amid extreme volatility in broader risk assets with the major U.S. equity indices down nearly 9% since the start of 2016. Indeed gold seems to have regained its haven status in the near-term as traders seek shelter from the ongoing market turmoil and although prices were lower this week, bullion is still 2.74% in the black for 2016. read more

Gold Boosted by Softer Fed Stance- Resistance at 1130

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Gold Boosted by Softer Fed Stance- Resistance at 1130

Gold Boosted by Softer Fed Stance- Resistance at 1130

Fundamental Forecast for Gold:Neutral

Gold prices are higher this week with the precious metal rallying nearly 1.8% to trade at 1117 ahead of the New York close on Friday. The move comes amid continued volatility in broader risk markets with the FOMC rate decision fueling speculation that the central bank will likely have to delay subsequent rate hikes. Although the dollar was weaker for the majority of the session, a late-week rally took the Dow Jones FXCM U.S. Dollar Index (Ticker: USDOLLAR) to fresh highs. Ongoing technical divergence however continues to suggest the greenback remains vulnerable- with bullion standing to gain from dollar softness. read more

CAD Rally Stalls After Reversing Longest Losing Streak Since 1971

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CAD Rally Stalls After Reversing Longest Losing Streak Since 1971CAD Rally Stalls After Reversing Longest Losing Streak Since 1971

Fundamental Forecast for CAD: Bearish

Steven Poloz’s refrain of a Bank of Canada rate cut that had become the preferred bet as the Loonie dropped brought a magnificent reversal for the CAD. However, toward the end of the week, the CAD rally stalled and CAD-crosses looked to oil for direction. For a majority of the week, a ‘Dash for Trash’ in Oil assets seemed sustainable as news of a coordinated global oil production cut appeared in the making. However, on Thursday, the news became obvious that such a plan was unlikely to develop, and the elusiveness of such a plan made Oil and, therefore, CAD unable to hold gains. One oil trader, Gerrit Zambo of BayernLB stated, “Don’t think there are many experienced people that really think Russia or Saudi Arabia would considerably cut production as long as they have the possibility to sell into the market,” read more

Australian Dollar Recovery at Risk on CPI Data, FOMC Meeting

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Fundamental Forecast for the Australian Dollar: Neutral

  • Conflicting cues abound as markets eye CPI data to inform RBA views
  • Hawkish FOMC statement may renew risk aversion, sink Aussie Dollar
  • See how FXCM traders are positioned in AUD/USD with DailyFX SSI

The Australian Dollar launched an aggressive recovery last week, posting the largest five-day advance in three months against a backdrop of firming risk appetite. Follow-through is far from assured however as a busy docket of high-profile event risk promises volatility and threatens to cap upside momentum. read more

US Dollar Traders on High Alert Amid GDP, FOMC, Market Volatility

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US Dollar Traders on High Alert Amid GDP, FOMC, Market VolatilityUS Dollar Traders on High Alert Amid GDP, FOMC, Market Volatility

Fundamental Forecast for Dollar:Bullish

  • Through trading at a 12-year high, the USDollar Index has struggled to make meaningful progress
  • While uncertain risk trends remain ahead, a horde of event risk ahead is anchored by a FOMC decision and US GDP
  • See our 1Q 2016 forecast for the US Dollar in our Trading Guides page.

Technically, the Greenback (USDollar specifically) has advanced for fourth consecutive weeks through Friday’s close. That’s an impressive run especially considering it is marking serial, 12-year high closes. That said, the run is virtually devoid of conviction – which is momentum from a price perspective. The lift the currency has found to its present lofty level was founded mainly through monetary policy, and the premium it afforded has been largely absorbed. Yet, that doesn’t necessarily mark the end of the bulls’ control. A divergent rate bearing will be revived with a range of rate decisions led by the Fed’s meeting. What’s more, the stronger the push of all those catalysts tracing back to risk trends; the closer the market comes to unleashing the Dollar’s haven appeal. read more