Strategy Video: Why Aren’t Fed Rate Forecasts Driving the Dollar?

By DailyFx | Updated July 30, 2014 AAA

DailyFX.com -

Talking Points:

• The consensus amongst the FOMC is for a first Fed hike in 2015 and further tightening thereafter

• Though the central bank's own rate forecasts outpace many counterparts, the markets aren't conforming

• Another sign of complacency, we are looking at another well of untapped dollar potential

What kind of Trading best suits you? Technical or Fundamental? Short-term or Long-term? Take our Trader Survey and find out.

The FOMC minutes reinforced a forecast that will carry a lot of weight with global capital markets and the US Dollar: a transition to policy tightening and rate hikes. And yet, where was the risk aversion and dollar rally that we would expect to accompany this change in tides? The market is discounting its rate projections and the impact they would have in the markets in part due to the universal sense of complacency hanging over us like a fog. That said the potential energy stored up in this theme is substantial. We discuss rate forecasts and the dollar in today's Strategy Video.

Sign up for John’s email distribution list, here.

Related Forex Analysis
  1. Weekly Trading Forecast: Volatility Keeps Boiling in the FX Market
    Forex News

    Weekly Trading Forecast: Volatility Keeps Boiling in the FX Market

  2. Dollar May Not Have a Quiet Thanksgiving...
    Forex News

    Dollar May Not Have a Quiet Thanksgiving...

  3. Gold Rallies on PBOC, ECB Surprise Easing -1207 Key Resistance
    Forex News

    Gold Rallies on PBOC, ECB Surprise Easing -1207 Key Resistance

  4. AUD To Look Past Local Data Yet Remains At Risk On Elevated Volatility
    Forex News

    AUD To Look Past Local Data Yet Remains At Risk On Elevated Volatility

  5. GBP/USD to Break Out on Less-Dovish BoE, Weak U.S. 3Q GDP
    Forex News

    GBP/USD to Break Out on Less-Dovish BoE, Weak U.S. 3Q GDP

Trading Center