Fed

Learn how the Fed, ECB, and BOJ impact forex markets. Get answers to FAQs on interest rates, currency trends, and trading strategies in this must-read guide.

The USD bullish rally continued to rage after Powell bluntly said that the Fed may not be in a hurry to cut rates, citing a strong labour market and a "remarkably strong" economy.

Gold’s now testing its 100-day MA and the 14-day RSI is at its lowest level in a year, hinting at a near-term bounce.

USDJPY Forecast: The bull run of the US Dollar Index has pushed the USDJPY back in the borders of its primary uptrend, and further volatility risks are on the horizon with the US CPI results.

With Kashkari throwing the word ‘pause’ into the mix ahead of a US CPI report, traders should brace themselves for further USD gains should it come in hotter than expected.

We finally get a bit of a breather from the US election and can shift out attention to today’s BOE and FOMC meetings, making it an ideal time to catch up on GBP/USD.

GBPUSD Outlook: Following Trump’s victory, the US Dollar surged, pressuring the British pound toward October lows. The pound’s long-term uptrend above its 15-year consolidation faces a key test on Thursday with BOE and Fed policy decisions.

The US dollar and yields have enjoyed a strong rally over the past five weeks, thanks to hotter US data, Fed members pushing back on rate cuts, and Trump leading in many polls. But with the US election on our doorstep and the potential for a delayed result, could this tie the Fed’s hands at this week’s meeting?

EURUSD, DXY Analysis: With the 25bps rate cut already priced into the market, the DXY is hovering at its December 2023 support. The next move depends on a confirming signal: either a wider rate cut to push it below that support or a rebound that could reverse the market's positive trends.

Traders appeared to be derisking ahead of the FOMC meeting, where money markets are backing a 50bp cut whereas economists still favour a 25bp cut. This saw ASX 200 futures track the Dow Jones lower, and USD/JPY post its best day in 23.

In the post-Bernanke “Fed Communication as a Policy Tool” era, this is the most uncertain that traders have ever been heading into a Fed meeting - what does that mean for markets?

EURUSD Outlook: As the market leans toward a 25bp rate cut in the upcoming Fed decision, the US Dollar remains stable against the EURUSD, which is expected to face additional headwinds as the ECB approaches its own rate decision, also signaling a potential 25bp rate cut.

As the last major economic release ahead of next week’s Federal Reserve Monetary Policy meeting, the US CPI report may well decide which path Jerome Powell and Company choose.

EURUSD, DXY Analysis: Both the EURUSD and the US Dollar Index (DXY) are hovering around critical levels that could determine whether we see a trend reversal or confirmation. These levels are closely tied to the extremes of December and July 2023, with market participants eagerly awaiting policy decisions to solidify the trends.

The leading indicators point to an as expected reading in this month’s NFP report, with headline job growth potentially coming in somewhere in the 130K-200K range

USDJPY Outlook: As monetary policy cycles operate with a lag, the impact of US interest rates is increasingly evident in the weakening US labor market, pushing the USDJPY closer to its 2024 lows ahead of the Non-Farm Payroll (NFP) employment reports.

If 144.00 gives way, a continuation toward the 13-month low around 140.75 could be next for USD/JPY.