Subscribe to RSS

US Dollar Direction Depends on Two Critical Weeks Ahead

US Dollar

Fundamental Forecast for Dollar: Neutral

  • US Nonfarm Payrolls disappointment sinks US Dollar ahead of Fed decision
  • Retail FX sentiment nonetheless points to Greenback gains versus key counterparts
  • Look at real-time FX positioning data via our Speculative Sentiment Index

Another volatile week across global financial markets left the US Dollar trading near key highs versus the Australian Dollar and other commodity-linked currencies. Yet the Greenback remains at risk of losses versus the Euro and Yen. What do we watch next?

The critical question for the US Dollar remains unchanged: when will the US Federal Reserve lift interest rates from record-lows? All eyes were on monthly US Nonfarm Payrolls labor data as many believed a strong result could pressure Fed officials into raising rates at their highly-anticipated September 17 meeting. Yet a somewhat-confusing result made for a choppy day of Dollar trading, and the US S&P 500 finished the week near its lows through the ensuing Friday trading session.

Interest rate futures show an implied 30 percent probability that the US Federal Open Market Committee will vote to increase rates in two week’s time—down notably from the 65 percent chance seen through mid-August. The sharp downgrade occurred on substantial financial market volatility, and the US Dollar fell as traders exited existing USD-long positions. It seems likely that the Greenback would fall further if we see further downtrades to September rate hike expectations.

A prominent hawk and FOMC voting member Jeffrey Lacker nonetheless spoke in favor of raising interest rates in prepared comments ahead of the US NFPs release issued Friday. When subsequently asked on the August labor market report, Mr. Lacker said payrolls growth showed “a strong number” which did not change the picture for monetary policy. Strong employment growth certainly supports the case for higher Fed interest rates sooner rather than later.

It’s nonetheless fairly clear that FOMC officials are unlikely to tighten policy amidst global market turmoil, and the US Dollar could fall sharply on a major disappointment. One senior Chinese central bank official went as far to blame Fed rate hike for sharp sell-offs in domestic markets. Logically this makes little sense—those rate forecasts were hardly a surprise to anyone paying attention to interest rates all year. Yet there’s likewise little doubt that the FOMC will not want to be seen as sparking broader uncertainty by raising interest rates in the face of substantial financial market turmoil.

We are thus headed into another week of uncertainty for the US Dollar, S&P 500, and other key assets. It is worth noting that FX volatility expectations have fallen for the week ahead. Yet it’s likewise clear that a bumpy Sunday market open in China, Japan, and other key markets could change that in a hurry. A US holiday on Monday the 7th may make for relatively illiquid market conditions, and caution is advised on what could be another challenging week for FX traders.

0 commentsback to post

Add your comment

Nickname:
E-mail:
Website:
Comment:

Other articlesgo to homepage

Start Forex Copy Trading your Perfect Partner – FXTM

Start Forex Copy Trading your Perfect Partner – FXTM(0)

Start Forex Copy Trading your Perfect Partner. Join ForexTime cutting-edge forex copy trading programme with ForexTime Invest and match up with a suitable trader. Let them trade while you watch your potential forex profits grow. Link:  Start Copy Trading your Perfect Partner Link:  $500 Welcome Cash Bonus Promo Link:  Receive $30 Tradeable Credit Free Bonus

150% Chinese New Year Bonus Promotion – FXCL Markets

150% Chinese New Year Bonus Promotion – FXCL Markets(0)

150% Chinese New Year Bonus Promotion to all FXCL Markets clients. Deposit any amount to your trading account and Receives 150% Chinese New Year Bonus Promotion Link:  150% Chinese New Year Deposit Bonus Link:  100% Smart Deposit Bonus Link:  130% Youtube Deposit Bonus Available to: All clients. Bonus Offer: 150% Chinese New Year Deposit Bonus

Trading Cryptocurrency with Leverage 1:1000 – NordFX

Trading Cryptocurrency with Leverage 1:1000 – NordFX(0)

NordFX clients are enjoying the ability to Forex Trading the most popular cryptocurrencies Bitcoin, Litecoin and Ethereum using a 1:1000 leverage ratio Link:  Trading Crypto with Leverage 1:1000 Link:  Demo Cup contest prize fund is $42000 Link:  100% Withdrawable Deposit Bonus Link:  55% Deposit Bonus Promotion Why should one trade with us? The trading is

Receive 55% Bonus on your Deposit Money – NordFX

Receive 55% Bonus on your Deposit Money – NordFX(0)

55% Deposit Bonus Promotion to All New and Existing Customers. 55% Bonus on Deposit Fund your account with $100 – $8,000 and receive a trading bonus up to $4,400! Link:  Demo Cup contest prize fund is $42000 Link:  100% Withdrawable Deposit Bonus Link:  55% Deposit Bonus Promotion Available to:  All new and existing accounts Bonus offer: 

Up to 100% Bonus on your initial Deposit – FXtrade777

Up to 100% Bonus on your initial Deposit – FXtrade777(0)

Up to 100% Bonus promotions on your initial Deposit to all FXtrade777 New clients. Get more for your money at FXtrade777 with an unforgettable Up to 100% Welcome Bonus. Link:  Up to 100% Bonus on your initial Deposit Bonus Offer: Up to 100% Bonus promotions on your initial Deposit to all FXtrade777 New clients. FXtrade777

FIFA World Cup Football Matches Tournament – FBS

FIFA World Cup Football Matches Tournament – FBS(0)

FIFA World Cup Football Matches Tournament. Participate in the contest and win the visit to the biggest football tournament of the year in Russia. Link: FIFA World Cup Football Tournament Link:  Just Share a Greeting Card and Gifts Link:  $50 Free Will be credited to Your Account Link:  $88.8 Forex No Deposit Bonus Link:  $123 Forex

100% Withdrawable Deposit Bonus up to $5000 – NordFX

100% Withdrawable Deposit Bonus up to $5000 – NordFX(0)

100% Withdrawable Forex Deposit Bonus up to $5000. The 100% Withdrawable Deposit Bonus and the initial deposit can be withdrawn after the required number of lots is closed. Profits can be withdrawn without restrictions. Link:  Demo Cup contest prize fund is $42000 Link:  100% Withdrawable Deposit Bonus Link:  55% Deposit Bonus Promotion Available to: All

50% First Deposit Bonus Prom – Hirose Financial UK

50% First Deposit Bonus Prom – Hirose Financial UK(0)

50% First Deposit Bonus Promo Maximum Bonus Amount is $1000 for all customers. The 50% Special Bonus offer for Hirose Financial UK customers who make a deposit to Binary Options account. They can withdraw deposit and profit at anytime!! Link:  50% Deposit Bonus Promotion Available to: All new traders Bonus Offer: 50% Special Bonus offer

200% Pending Bonus for your Next Deposits – CTTrade

200% Pending Bonus for your Next Deposits – CTTrade(0)

200% Pending Bonus for the Next Deposits. Just make the re-deposit and during the day we will credit your 200% Pending Bonus. Link:  200% Pending Bonus for the Next Deposits Available to: All new account How to get Pending Bonus? Just make the re-deposit and during the day we will credit your bonus. This bonus

Free SERENITY Tokens New Year Promotion – Grand Capital

Free SERENITY Tokens New Year Promotion – Grand Capital(0)

Receive free SERENITY tokens for Forex, futures and cryptocurrency trading. The promotions is supported by SERENITY. The objective is to promote and brand the platform as a secure trading solution for trader Link:  Receive free SERENITY tokens for trading Link:  $500 Forex No Deposit Welcome Bonus Link:  Up to 444% Profit Receive for a single

read more

Forex Featured BrokerSocial Trading

Contacts and information

ForexDepositNews.com Forex Deposit Bonus, Forex No Deposit Bonus, Forex Live Contest, Forex Demo Contest, Free Forex Bonus Forex Brokers Review and Other All Forex promotions.

ForexDepositNews.com

Social networks

Most popular categories