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

Up to 50% Welcome Bonus on Each Deposit – Fort Financial

Up to 50% Welcome Bonus on Each Deposit – Fort Financial(0)

Up to 50% Welcome Bonus of Every Deposit to All New and Existing Traders. You Deposited $1000 on your account, chose a 50% bonus and got 500 extra dollars to the initial deposit amount. Link: $888 Extra Bonus Amount Promotions Link:  $5 Forex No Deposit Welcome Bonus Link:  Up to 50% Bonus of Every Deposit

300 USD No Deposit Forex Welcome Bonus – CARRAX

300 USD No Deposit Forex Welcome Bonus – CARRAX(0)

300 USD No Deposit Forex Welcome Bonus for 30 calendar days for real trade in the forex market. Only Carrax verified users may participate in the 300 USD No Deposit Forex Welcome Bonus Promotion. Link:  300 USD Forex No Deposit Bonus Withdrawal: Only profits can be withdrawn after 30 days of having the account active.

FX Zone Currency Capital Forex Trading Contest – FXTM

FX Zone Currency Capital Forex Trading Contest – FXTM(0)

FX Zone Currency Capital Trading Contest final Bid Central. Sharpen your forex trading skills completely RISK-FREE as you enter ForexTime Broker simulated forex world of 2017 the FX Zone Currency Capital Contest. Link:  FX Zone Currency Capital Contest Link:  $25 Per Referral Earn up to $10000 Link:  Receive $30 Tradeable Credit Bonus Link:  Loyalty Cashback

$123 Free No Deposit Welcome Bonus – FBS Broker

$123 Free No Deposit Welcome Bonus – FBS Broker(0)

$123 Free No Deposit Forex Bonus of FBS Broker all new members to get a Free bonus of $123 without initial deposits and start a risk-free forex liveForex Trading. Link:  $123 Free Forex Bonus Promotion Link:  100% Deposit Bonus Promotion Link:  $88.8 Lucky No Deposit Bonus (for Malaysian traders) Available to: All new traders Ending

$50 Free No Deposit Bitcoin Bonus Special Promo – UFX

$50 Free No Deposit Bitcoin Bonus Special Promo – UFX(0)

$50 Forex No Deposit Bitcoin Bonus Special Promotion to all new trading account holder. Start Forex Trading Bitcoin with UFX and  Get a $50 No Deposit Bonus Link:  $50 Forex No Deposit Special Bonus Link:  $50 Free No Deposit Bitcoin Bonus Link:  100% Real Money CashBack Promo Link:  $5000 BitCoin Rewards Bonus Promo Available to:

Forex Special Promo FREE Forex Trading Signals – CMSTrader

Forex Special Promo FREE Forex Trading Signals – CMSTrader(0)

Forex Special Promotion for our new clients. Open account and get our FREE Forex Trading Signals with high success claim them Now 91% Success! Link:  Top Social Copy Trading Platforms Link:  FREE trading signals Special Promotion Ending Date:  31 December 2018 Available to:   New Clients only Bonus Offer: Get FREE forex trading signals Special promotion

50% Welcome Bonus Limited Time Offer – Trade Time

50% Welcome Bonus Limited Time Offer – Trade Time(0)

50% Welcome Forex Bonus Limited Time Offer to TradeTime All New Clients. Join TradeTime and receive your 50% Welcome Forex Bonus Now! Link:  50% Welcome Bonus Limited Time Offer Available to: All New Clients Bonus Ending Date: 31 December 2018 Bonus offer: 50% Welcome Bonus Limited Time Offer to TradeTime All New Clients. Watch how

100% CashBack Real Money Bonus Promotion – UFX

100% CashBack Real Money Bonus Promotion – UFX(0)

100% Real Money CashBack Promotion to all new and existing clients. Join and gain exclusive access to the ONLY online trading 100% Cashback rewards bonus program Link:  100% Real Money CashBack Promotion Link:  $50 Forex No Deposit Bonus Promotion Available to: All new trading account Ending Date: 31 December 2018 Bonus offer: 100% Real Money

30 USD Forex Free Welcome Bonus Promotion – Tickmill

30 USD Forex Free Welcome Bonus Promotion – Tickmill(0)

30 USD Forex Free Welcome Bonus Promotion to All new traders. $30 Free Forex Welcome Account is available to all new clients who expressed a wish for it during the registration process. Link:  Weekly Demo Race Trading Contest Link:  $30 Free Welcome Bonus Campaign Link:  Forex Monthly Live Trading Contest Available to: All new traders

Forex Tradable Deposit Free Bonus 101% – FreshForex

Forex Tradable Deposit Free Bonus 101% – FreshForex(0)

Forex Tradable Deposit Free Bonus 101% gives a real chance to start Forex trading with low investment and double return! Forex Tradable Deposit Free Bonus from FreshForex helps you to boost your trading volume and thus, the profit you earn. Link:  Tradable Deposit Bonus 101% Link:  $200 No Deposit Welcome Bonus Available to: All New

read more

Forex Featured Broker

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