At the moment, policymakers have left the door open to a cut.
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The latest tone shift, by contrast, has been dubbed dovish. Both assessments seem mistaken. This is the level at which policy is neither supportive nor restrictive and is notoriously elusive. Going past it unnecessarily may hurt growth but failing to breach it when appropriate may overheat the economy.
The Fed estimates the neutral setting is somewhere in the 2. The next piece in this puzzle is a darkening global economic outlook. Data from JPMorgan shows worldwide manufacturing- and service-sector activity growth has been slowing since the beginning of the year. To drive the point home, figures from Citigroup reveal that global economic news-flow has increasingly deteriorated relative to baseline forecasts over the same period. Powell has painstakingly explained that despite being aware of and vigilant about external headwinds, the Fed intends to tune policy to domestic objectives.
Within this context, the latest maneuvers may have been meant to clear the way for tightening despite global disappointments. In fact, the latest cues from US economic data are supportive of just such an interpretation. Core CPI price growth registered on-trend at 2. This sets the stage for the markets to interpret a status quo Fed outlook — meaning one that is unchanged from September and continues to envision three rate hikes in — as relatively hawkish. Indeed, the markets are now barely priced for even one rate rise next year.
The US Dollar is likely to trade broadly higher against its major counterparts in this scenario. To c ontact Ilya, use the comments section below or IlyaSpivak on Twitter. Losses picked up after Thursday, when the European Central Bank paved the way for broad Euro weakness. It seems more likely than not that forthcoming inflation readings are depressed, given the fact that energy prices continue to fall: Brent Oil is down by Positioning has become interesting once more, but nevertheless persists on the historically light side and thus the risk of capitulation short covering that would send the Euro sharply higher remains low.
Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: To contact Christopher, email him at cvecchio dailyfx. Fundamental Forecast for Japanese Yen: The ongoing shift in U.
For more in-depth analysis, check out the Q 4 Forecast for Japanese Yen. Fundamental Forecast for GBP: In current market conditions, and with the total lack of a cohesive Brexit plan, trading Sterling is nigh on impossible to recommend from a risk- reward stance, leaving our outlook neutral even though the path of least resistance for the British Pound is pointing lower.
As we stand there are a few scenarios that may play out in the short-term, nearly all damaging for the British Pound. The calls for the PM to resign may be listened to by Theresa May, unlikely but still a possibility - the opposition may call for her to step-down, more likely but the Labour Party is currently divided on its Brexit stance - the EU offers some meaningful concessions to help the bill get through Parliament, again highly unlikely - no agreement and the UK goes to WTO rules, looking possible - and finally another Brexit Referendum, a view now gaining traction and a real possibility.
While a second Brexit Referendum, and a likely win for Remain, would boost Sterling, the run-up to this break with democracy will weigh heavily on the British Pound. In a nutshell — if a Government is unable to lead and inspire confidence, putting a value on its currency is impossible. IG Client Sentiment data show We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests that GBPUSD prices may continue to fall.
However, the combination of recent daily and weekly positional changes give us a mixed trading bias. To contact Nick, email him at nicholas. Although risk-off sentiment should send the precious metal higher, gains in the Greenback overpowered bullish bids for gold. Markets are currently pricing a 77 percent chance that the Fed will raise its benchmark policy interest rate for the fourth time this year according to the futures market implied probability.
In general, Gold has an inverse relationship with interest rates due to the precious metal not yielding any cash flows like debt instruments. Higher rates result in weakened demand for the commodity as alternative assets such as US Treasuries provide a higher rate of return.
Eyes will also closely watch for the release of several key economic indicators out of America next week. If actual results miss expectations, risk-off sentiment should continue and further boost demand for gold.
However, fears over a slowing global economy will incite further rotation of capital from stocks to bonds with investors flocking to the safety of US Treasuries. For a list of global economic events and data releases, check out our real-time Economic Calendar. This drives up demand for the Greenback which becomes a headwind for gains in gold due to the inverse relationship between the two assets. As the damaged Asian economy continues to experience downward pressure amid worsening economic data due to the ongoing trade war with the United States, the Dollar may appreciate further against its Chinese counterpart.
Due to the mixed event risks and waning bullish technical indicators, the forecast for XAU will be neutral over the week of December Take a look at client sentiment for insight on client positioning and trader bearish or bullish biases. This occurred against a volatile backdrop due to the anticipated policy interest rate decision from the Bank of Canada BOC , releases of key economic data and speculation over OPEC leaders gathering to agree on curbing oil output.
As widely expected, the BOC decided to maintain their overnight policy rate target at 1. Key concerns cited cratering oil prices, muted business investment and slowing growth across major developed countries.
Consequently, markets interpreted the comments as dovish and significantly reduced their expectations for future rate hikes. However, the steep drop in expectations could be an exaggerated knee-jerk reaction. While the BOC stated that the Canadian economy expanded in line with projections for the third quarter, this could change over the final months of the year as economic data is suggesting positive momentum is fading.
On a more positive note, business investment should pick up with the recently signed US-Mexico-Canada USMCA agreement providing more clarity on trade between the countries. Also, employment numbers reported at the end of the week surprised to the upside. The Canadian unemployment rate dropped to 5. Another development that could support a beaten down Loonie is the recent agreement by OPEC and its partners to cut oil production by 1.
Crude oil leapt nearly 6 percent on the news which also sent the Canadian Dollar higher. The data dependent BOC will closely examine housing stats reported next week as it looks for signs of a sustained rebound across the sector. As for its American counterpart, the US market could come under pressure from highly anticipated data points that pose material downside event risk to the Greenback.
With the US Dollar already starting to lose some of its luster due to weaker than expected economic developments and seemingly dovish remarks from the Federal Reserve, the USDCAD could see some downside in the short term due to the recent shift in sentiment.
The first is hope for a trade rapprochement between Washington and Beijing. So, Australia has much to gain from a trade thaw between the two global giants. More indeed than any other third country, arguably. And no doubt trade headlines, if they come, will move the Aussie this week. But their timing is impossible to predict. Federal Reserve monetary policy meetings meanwhile are timed with scrupulous regularity.
One is coming up early on Wednesday, Australian time. Economic uncertainties abound, from Brexit to rising US deficits and clear signs of economic slowdown around the world. Moreover, the Fed has already raised rates eight times from their financial crisis lows.
A pause for reflection could be easily justified. So the Australian Dollar market will likely be stuck like all others while it waits to see what the Fed has to say on Thursday. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets.
Be sure to make the most of them all. However, this also means that a strong U. Silver mining can be traced back thousands of years, to the first recorded mining activity in B. By the end of the 19th century, humans were producing over million troy ounces a year to fill the demand for the precious metal.
Precious metals, such as silver and gold , have been considered currencies themselves in the past, however, in recent times they have largely been replaced by fiat currencies on forex markets. Even if you decide not to trade the precious metal itself, the silver forecast is so closely tied to the global economy that any movement can be a useful indicator for a range of other markets like the US Dollar and gold.
Find out the fundamentals that look likely to drive future price action. Silver is one of the most traded commodities in the world. Learn how to trade silver from the experts. The gold-silver ratio is a useful tool for traders of the two precious metals. We share two strategies on how to trade knowing this ratio. Yesterday, precious metals reversed on the Fed meeting, still have some positives short-term, but that could change if reversals start leading to follow-through.
But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk. Discover our extensive calendar of free educational webinars and test your trading skills, risk-free, with an IG demo account.
A demo account is intended to familiarize you with the tools and features of our trading platforms and to facilitate the testing of trading strategies in a risk-free environment. Results achieved on the demo account are hypothetical and no representation is made that any account will or is likely to achieve actual profits or losses similar to those achieved in the demo account.
Conditions in the demo account cannot always reasonably reflect all of the market conditions that may affect pricing and execution in a live trading environment. Euro Choppiness to End Soon. What Drives the Price of Silver? Silver Price History Silver mining can be traced back thousands of years, to the first recorded mining activity in B.
For the latest silver news, visit our market news and trading strategies articles below. Top Silver Trading Strategies Silver is one of the most traded commodities in the world. Trading the Gold-Silver Ratio: E-Mail Please enter valid email.
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