logo |

News

    Home   >     Industry    >     Main body

    US Dollar Outlook: USD Volatility to Rise with Fed Decision Due

    Abstract:US DOLLAR OUTLOOK: USD PRICE ACTION HINGES ON UPCOMING FED ANNOUNCEMENT
    •   US Dollar has lacked direction so far this week as traders await Wednesdays Fed decision

    •   Federal Reserve officials will give markets an updated dot plot and economic projections

    •   DXY Index tagged its 50-day simple moving average likely due to fears of FOMC tapering

    usdollar.jpg

      The US Dollar had another uneventful session with the broader DXY Index little changed on Tuesday. General lack of direction for USD price action so far this week is likely due to high-impact event risk posed by the Fed announcement on tap for release tomorrow. The Federal Reserve will publish its interest rate decision Wednesday, 16 June at 18:00 GMT alongside updated economic projections and fresh dot plots from FOMC officials.

    DXY – US DOLLAR INDEX PRICE CHART: DAILY TIME FRAME (18 JANUARY TO 15 JUNE 2021)
    DXY

      Since US Dollar outlook seemed tilted to the upside three weeks ago, we have seen the DXY Index stage a decent rebound to test the underbelly of its 50-day simple moving average. Perhaps the move is explained by traders unwinding their bearish bets and positioning for the risk of a hawkish shift in Fed policy.

      That said, potential shifts in the Fed dot plot and language around ‘substantial further progress’ will likely be major focal points for markets and where the US Dollar heads next. I suspect the odds are favorable for the Fed to announce the start of taper timeline discussions, which would stand to boost the US Dollar. The initial reaction could putter out, however, if Fed Chair Powell softens the blow with patient and confident rhetoric.

    USD PRICE OUTLOOK – US DOLLAR IMPLIED VOLATILITY TRADING RANGES (OVERNIGHT)
    USD

      This ‘rip-then-dip’ scenario for the US Dollar is supported by relatively muted overnight implied volatility readings. Similarly, FX options traders pricing in comparatively-low event risk for the Fed meeting points to the likelihood that the central bank will leave monetary policy largely unchanged. To that end, if the Federal Reserve opts to echo its transitory inflation narrative, there will likely be a bearish reaction by the US Dollar.

      Stay tuned on WikiFX, more news coming soon!

    分割线1.png
    Copy

    United States Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand

    United States Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand
    Current Rate  :
    --
    Amount
    United States Dollar
    Available
    -- United States Dollar
    Risk Warning

    The Database of WikiFX comes from the official regulatory authorities , such as the FCA, ASIC, etc. The published content is also based on fairness, objectivity and fact. WikiFX doesn't ask for PR fees, advertising fees, ranking fees, data cleaning fees and other illogical fees. WikiFX will do its utmost to maintain the consistency and synchronization of database with authoritative data sources such as regulatory authorities, but does not guarantee the data to be up to date consistently.

    Given the complexity of forex industry, some brokers are issued legal licenses by cheating regulation institutes. If the data published by WikiFX are not in accordance with the fact, please click 'Complaints 'and 'Correction' to inform us. We will check immediately and release the results.

    Foreign exchange, precious metals and over-the-counter (OTC) contracts are leveraged products, which have high risks and may lead to losses of your investment principal. Please invest rationally.

    Special Note, the content of the Wikifx site is for information purposes only and should not be construed as investment advice. The Forex broker is chosen by the client. The client understands and takes into account all risks arising with Forex trading is not relevant with WikiFX, the client should bear full responsibility for their consequences.