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

100% Withdrawable Bonus on your First Deposit – NordFX

100% Withdrawable Bonus on your First Deposit – NordFX(0)

Up to 150% Bonus for a First Time to binary options Account. For a perfect start, we offer you a 150% bonus for a first-time $5,000 deposit. Link:  Up to 150% Bonus for a First Time Link:  100% Withdrawable Deposit Bonus Link:  55% Deposit Bonus Promotion Link:  DemoCup contest  prize fund is $42000 Available to:

$10 Free Credited into your account – Champion FX

$10 Free Credited into your account – Champion FX(0)

$10 Free Welcome Credited Bonus into your account. Sign up for a ChampionFX Cent live trading account today and get a Free Welcome Forex Credited Bonus worth USD 10 Link:  $10 Free Credited Available to: New and Existing Traders. Ending Date: 31 December 2018 Bonus Offer: $10 Free Welcome Credited into your account to All

Monthly Live Forex Trading Competition – Tickmill Ltd.

Monthly Live Forex Trading Competition – Tickmill Ltd.(0)

Forex Monthly Live Trading Competition. Put your forex trading skills to test and win up to $1000 every Month! Forex Live Trading Competition is only available for clients of Tickmill Ltd.(FSA Regulated) Link:  Weekly Demo Race Trading Contest Link:  $30 Free Welcome Bonus Offer Link:  Forex Monthly Live Trading Contest Available to: All new traders

Get $1500 Forex No Deposit Welcome Bonus – InstaForex

Get $1500 Forex No Deposit Welcome Bonus – InstaForex(0)

Get $1500 No Deposit Forex Bonus from InstaForex no need to risk your own money if you have already got funds to earn more money. The $1500 No Deposit Free Bonus from InstaForex is an exciting opportunity to start Forex live trading. Link:  $500 Forex No Deposit Free Bonus Link:  $1000 Forex No Deposit Free

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

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