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The trading week is approaching its end and, for now, a neutral tone continues to dominate the euro's short-term price action. EUR/USD has recorded a move of only around -0.15% during the week, highlighting the pair's inability to establish a clear direction in favor of either the euro or the U.S. dollar.
FOMC Chairman Warsh fell short of delivering a clear hint that the Fed would raise rates again in December, resulting in a modestly less-hawkish-than-anticipated short-term interpretation of the event - what does that mean for the US dollar?
Over the last few trading sessions, gold has managed to stage a modest recovery. The precious metal has gained more than 1.7% across the last two sessions, a move that has introduced some buying momentum after several weeks of sustained pressure on prices. For now, this rebound appears to be driven largely by the cautious atmosphere dominating markets ahead of the Federal Reserve's monetary policy decision.
Fed Funds futures traders are pricing in ~90% odds that the FOMC leaves rates unchanged this week, but the big question is whether FOMC Chairman Warsh can deliver a true hawkish hike.
Although the Mexican peso is attempting to regain some ground during today's session, price action throughout the week shows a gain of more than 1.00% in USD/MXN, highlighting buying momentum that continues to favor the U.S. dollar.
Fed pricing has turned more hawkish, oil has surged and Treasury yields have backed up hard. Here’s how the pieces fit together.
Assuming the Fed delivers the expected hike, traders will want to know WHAT could prompt another hike, WHY they hiked this time, and HOW to interpret the dot plot.
From 1994 and 1999 through to the dollar surge of 2022, history shows Fed tightening has produced very different outcomes for DXY.
The bear steepening in the Treasury markets, decision outsourcing to the bond market, three hawkish dissents, dollar weakness, and simultaneous drop in stocks and bonds are warning signs for new FOMC Chairman Warsh - volatility ahead?
Once again, gold is showing signs of short-term weakness. Over the last 4 trading sessions, XAU/USD has accumulated a decline of nearly -2.4%, highlighting a relevant selling bias ahead of the Federal Reserve decision.
The baseline expectation is that the FOMC will hold interest rates unchanged in a 10-2 vote, while keeping a potential September hike firmly on the table - what could surprise traders?
The FOMC minutes were broadly hawkish, with “a few participants” that saw a case for raising the target range and “several” questioning whether current policy is restrictive enough - what does it mean for the Nasdaq 100?
The FOMC was more hawkish than anticipated, with interest rates rising across the curve, stock indices edging lower, and the US dollar rallying - see what Chairman Kevin Warsh said and what it means!
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