By Dailyfx......
- It’s been a dizzying backdrop in the Greenback over the past few weeks as the rate cut rally from the Fed’s first cut in a decade led into a strong sell-off on the back of a tariff announcement.
- As tariffs were delayed, both stocks and the US Dollar rallied; but with FOMC minutes and the Jackson Hole Economic Symposium taking center-stage, can that strength continue?
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The US Dollar is now flat for the week as a couple of key drivers on the economic calendar approach. Today at 2 PM ET marks the release of FOMC minutes from the July rate decision. That was the Fed’s first rate cut in a decade and the manner with which it came in brought a bit of confusion into the mix. While the FOMC did cut rates by 25 basis points, the bank wasn’t nearly as dovish as what markets were looking for and the net impact of that rate decision was USD-strength as the Dollar churned up to fresh two-year-highs shortly after. Will this afternoon’s release of meeting minutes show a more-dovish Fed than what was evident at the rate decision three weeks ago?
The rate cut rally in the US Dollar then led-in to the additional tariff announcement on China, which created reverberations throughout markets with US equities getting hit lower on the heels of that surprise. The Greenback dropped as well, although the fall would remain relatively brief as support came in a week later as tariffs were delayed. The currency shot-higher over the next six trading days, eventually finding resistance around the 98.37 level; and that’s what helped to hold the highs yesterday. Read More.....