USD Falling Against It Main Trading Partners

Posted by: : Paul EbelingPosted on: March 29, 2015 USD Falling Against It Main Trading Partners

USD Falling Against It Main Trading Partners

The USD declined against its trading partners following the news that Q-4 US GDP remained unchanged against its prior revision.

Although the initial reaction shows that there is some disappointment that the GDP figure was not revised higher as some expected, the data itself is not disappointing, and the US Fed will be satisfied that the prior Quarter saw the largest gainer in consumer spending in about 8 yrs.

All traders are interested in now is when the Fed will pull the trigger and begin to raise US interest rates, and although the USD Bulls might not receive the rate hike they want in June or September, they will still receive an interest rate increase at some point this year.

If anything, the GDP figure not being revised higher just provides some leeway for the Fed to be cautious, and in some ways hesitant, towards raising interest rates so soon.

It is quaint that some have spoken about the recent USD softness as the beginning of a correction, because it is nothing other than traders taking profit after what has become a solid and lengthy USD rally.

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There will be times when traders show impatience, as with the FOMC statement last week, and suddenly begin to close USD positions, but the overall USD uptrend is going to remain supported for as long as optimism remains that the Fed will raise interest rates some time soon.

We here at HeffX-LTN believe that the USD rally will begin again once traders receive clarity on the potential timing of a US interest rate increase. Right now the fed funds rate is indicating a 40% chance of a raise in September, down from 50%.

At the end of the day, the Fed will be able to raise interest rates before the overwhelming majority of central banks can even contemplate the idea. The driver behind the USD rally has not only been the timing of when the Fed could raise rates, but also been because so many other central banks (over 20 so far this year) have eased monetary policy.

Overall, the  contrast in global central bank policy will remain the dominate driver in currency market volatility for some time to come.

Stay tuned…


Paul Ebeling

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

Trade FX, Equities and Options with the World's Leading Platform , call our trade desk 631 482 0376, or contact us to get started.

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