Market News & Analysis

USD decline continues after FED minutes

Jan 10, 2019 | Forex News

The USD took a fresh beatdown overnight sending risk markets higher and turning around what looked like weak sessions. The FED minutes set the tone for a new round of heavy USD selling after last Friday the FED sent the USD sharply lower after comments hinted at a pause in rate raises. Last nights minutes confirmed this, Gold and Risk majors all jumped to the USD the EUR had a solid night adding just over 100 pips. 

Minutes from the Fed’s Dec.18-19 meeting revealed that several policymakers were in favour of the US central bank keeping rates steady this year. Some of the key points out of the FED minutes. 

“Though financial conditions had tightened and Federal Open Market Committee global growth had moderated, members generally anticipated that growth would remain above trend and the labour market would remain strong.”

“Several participants expressed the view that it might be appropriate over upcoming meetings to remove forward guidance entirely and replace it with language emphasizing the data-dependent nature of policy decisions.” –

“The tightening in financial conditions so far did not appear to be restraining real activity, although a more persistent tightening would undoubtedly weigh on business and household spending.” 

“Risks to the outlook appeared roughly balanced, although some noted that downside risks may have increased of late.”

The USD index fell sharply and is now trading close to 95 even after a reaching a high of 97.71 on December 14th last year. 94.95 is the next low for sellers to test. The USD index has been under pressure since its Dec 14 high but selling has accelerated since the 3rd of January after the Fed first hinted at a change in policy. 

The USD has also been savaged to the CAD. The CAD has been lifted by higher oil prices of late while the USD has been hit hard by policy change. The USDCAD has lost 413 pips in 6 trading sessions! As we see constantly in the market’s sentiment can change very quickly! 

Sources: CNBC – Daily FX – Netdania 

Good trading from EightCap

 

* The information provided here has been prepared by EightCap’s team of analysts. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and do not reflect the opinions of EightCap.

In addition to the disclaimer on our website, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. EightCap accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

Please note that past performance is not a guarantee of or prediction of future performance. This communication must not be reproduced or further distributed without prior permission.

 

 

 

 

 

HEAD OFFICE

Level 6, 360 Collins Street
Melbourne, VIC
3000 Australia

Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with EightCap, and seek independent advice if necessary. Forex and CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing substantially more than your initial investment). A Product Disclosure Statement (PDS) and a Financial Services Guide (FSG) for our products are available to download from our Legal Documentation page. You must assess and consider them carefully before making any decision about using our products or services.

EightCap is a registered business name of EightCap Pty Ltd (ABN 73 139 495 944). We are regulated by the Australian Securities & Investments Commission (ASIC) - our AFSL number is 391441. This licence authorises us to provide financial services to people in Australia.

The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.