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

By DailyFx | July 09, 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.

comments powered by Disqus
Related Forex Analysis
  1. Weekly Trading Forecast: FX Traders Prepare for Heavy Volatility on FOMC, GDP and ...
    Forex News

    Weekly Trading Forecast: FX Traders Prepare for Heavy Volatility on FOMC, GDP and ...

  2. Dollar and Market Confidence Ride on FOMC Decision
    Forex News

    Dollar and Market Confidence Ride on FOMC Decision

  3. Gold Losses to Accelerate on Less Dovish FOMC- Support Break Eyes 1206
    Forex News

    Gold Losses to Accelerate on Less Dovish FOMC- Support Break Eyes 1206

  4. AUD Faces A Potential “Breakout” On US Heavy Event Risk
    Forex News

    AUD Faces A Potential “Breakout” On US Heavy Event Risk

  5. New Zealand Dollar at Risk on Dovish RBNZ, Status-Quo FOMC
    Forex News

    New Zealand Dollar at Risk on Dovish RBNZ, Status-Quo FOMC

Trading Center