Subscribe to RSS

US Dollar Nears 12 Year High But It May Wait for FOMC’s Okay

USD

Fundamental Forecast for Dollar: Bullish

  • Despite relief for Greece, the Euro continues to decline and thereby bolster the case for USD

  • Janet Yellen continued to beat the rate hike drum, now we are in the blackout period before the July meeting

  • Join DailyFX Analysts for daily discussions on the Dollar and FX markets at DailyFX on Demand

The US Dollar advanced for the fourth straight week – a feat we haven’t seen accomplished since January when the currency was still in the midst of its strongest move in decades. The swell behind the benchmark has a sound enough fundamental platform: competitive economic advantage, interest rate timing advantage and a haven status that is ever-ready to open the door to the frightened. These are broad themes with enduring position in the market. However, motivation is somewhat lacking. And, given the sparse docket in the week ahead along with the very dense period that follows it; further drive may prove restrained.

For mileage, there is no other fundamental theme that has leveraged as much strength from the Greenback as monetary policy forecasts. While most are still cutting rates (the BoC, RBNZ, RBA) or pursuing open-ended stimulus efforts (ECB, BoJ, PBoC), the Federal Reserve is in a very small group that is moving ever closer towards tightening. This past week, Fed Chairwoman Janet Yellen repeated familiar warnings that signal the group is ready to lift rates rather soon. In her Congressional testimony she reiterated that the current pace of conditions warranted a removal of accommodation earlier so that the subsequent pace could be more reserved. She would also voice a concern that some of her more hawkish colleagues have been more outspoken about: the risks of waiting too long.

According to the consensus for rate expectations through the end of 2015 the Fed issued at its last policy meeting, we are likely looking at two 25 basis point hikes before the year closes. Strategically, that would leave September as the latest start as they have consistently remarked that they are averse to back-to-back tightening. That being said, the market has maintained its skepticism. Fed Fund futures still do not price a first rate hike fully until March of next year. According to the curve, the market believes there is an 84 percent probability that the first move will come by December.

There is plenty of doubt in this market that can feed further Dollar rally should it be stamped out. While we gained some traction on this last week with data and commentary, we are likely to see little further motivation in the week ahead. With the next Fed meeting on June 29, we are in the blackout period where policy officials traditionally refrain from making remarks on monetary policy. Data is also light – particularly compared to the US 2Q GDP figures also due the following week.

Left to its own devices, the Dollar can certainly drift higher. However, there are external forces that may divert trajectory or leverage velocity. The movement of the Greenback’s largest counterparts can certainly prove strong motivation. Despite finding relief from the pressure of impending doom for Greece, the Euro has still stumbled. Should it turn to outright selling, the Dollar will likely reap much of the benefit. And, of course, if general risk trends start to flounder, the Dollar will certainly surge on the haven demand.

0 commentsback to post

Add your comment

Nickname:
E-mail:
Website:
Comment:

Other articlesgo to homepage

$25 Free Forex Welcome Gift to Start Trading – TRADE

$25 Free Forex Welcome Gift to Start Trading – TRADE(0)

Sign up and receive $25 Free Forex Welcome Gift to Start Forex Trading. $25 Free Forex Welcome Gift by TRADE.com to trade forex live trading without any Deposit and investment to verify live account Link:  $25 Free Welcome Gift to Start Trading Available to: All new trading account Bonus offer: Sign up and receive $25

Stay Informed About Crucial BREXIT News – UFX Broker

Stay Informed About Crucial BREXIT News – UFX Broker(0)

How will BREXIT affect the value of the GBP? Could the EUR be affected, as well? Other European markets may see volatile market reactions as investors wonder how the UK may profit from its own market, rather than remain part of the EU’s single market. Stay Informed About Crucial BREXIT News with UFX Link:  Stay

Up to 444% Profit Receive for a Single Trade – Grand Capital

Up to 444% Profit Receive for a Single Trade – Grand Capital(0)

Up to 444% Receive Profit with our new Express Options for Grand Capital Ltd Binary Option Broker. Make a correct prediction for 3 assets at the same time Link: Up to 444% Profit Receive for a single trade Link:  $500 Forex No Deposit Welcome Bonus Link:  40% Forex Welcome Deposit Bonus Available to: All new

$6000 First Deposit Bonus Limited Time Offer – XTrade

$6000 First Deposit Bonus Limited Time Offer – XTrade(0)

Up to $6000 First Deposit Bonus Limited Time Offer (T&C applied) on all Deposits for all Customers. Become an XTrade customer, and get 60% Forex Special bonuses (T&C applied) on all deposits made during your first 7 days!! Link:  $50 Free Cash Welcome Bonus Promotion  (T&C applied) Link:  $30 Free Account Verification Bonus (T&C applied) Link: 

50% Deposit Bonus and $50 No Deposit Bonus – FortFs

50% Deposit Bonus and $50 No Deposit Bonus – FortFs(0)

$50 Forex No Deposit Bonus Promo Action to all eligible clients. Every client who passed the verification process in their trader’s room can get the $50 No Deposit Welcome Bonus Link:  $50 Forex No Deposit Welcome Bonus Link:  Up to 50% Bonus of Every Deposit Link:  15% Support Margin Bonus Promo Available to: New and

15% Forex Welcome Deposit Bonus Up to $1000 – XM

15% Forex Welcome Deposit Bonus Up to $1000 – XM(0)

15% Forex Welcome Deposit Bonus Up to $1000 and $30 Forex No Deposit Bonus Welcome Bonus brings Real Account clients the best rewards available. Entering the markets and trading with XM enables you to earn from your trades and build your own bonus up to a maximum of $1,000. Link:  $30 Forex No Deposit Bonus

Free $200 Earn with Binary No Deposit Bonus – Ayrex

Free $200 Earn with Binary No Deposit Bonus – Ayrex(0)

Earn $200 Free with Binary Options No Deposit Bonus to all new activated trading account. Ayrex presents its very first Binary Options No Deposit Bonus for new traders. Sign up to get FREE $30 and turn them into a fully withdrawable $200! Link: $200 Earn with No Deposit Bonus Link:  $100 Free Win in Just One

$30 Free No Deposit Welcome Bonus Campaign – Tickmill

$30 Free No Deposit Welcome Bonus Campaign – Tickmill(0)

$30 Free No Deposit Welcome Bonus Campaign to All new traders. $30 Free Welcome Account is available to all new clients who expressed a wish for it during the registration process. Link:  $30 Free Welcome Bonus Offer Available to: All new traders Ending Date: 31 December 2017 Bonus Offer: $30 Free No Deposit Welcome Bonus

Get $2017 No Deposit Hot Bonus Promotion – FreshForex

Get $2017 No Deposit Hot Bonus Promotion – FreshForex(0)

$2017 No Deposit Hot Forex Bonus Offer to all new verified customers. The $2017 Hot No Deposit Forex Bonus offers you a unique opportunity to test trading strategies of FreshForex Link:  $2017 No Deposit Hot Bonus offers Available to: All New Traders. Ending Date: 30 April 2017 Bonus Offer: $2017 No Deposit Exclusive Hot Bonus

100% Real Money Cash Back Bonus Promotion – UFX

100% Real Money Cash Back Bonus Promotion – UFX(0)

100% Real Money CashBack Promotion 2018 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 2017 Bonus offer: 100% Real

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