Forex

The Turkish lira strengthened by as much as 15% after President Erdogan announced a plan to guarantee local deposits against market volatility. Accordingly, the government will pay the difference between the value of savings in lira and equivalent dollar deposits. The market has been heavily short lira, and the jump in value is likely a short squeeze. Moreover, the weekly chart's overbought condition has now been normalised (blue rectangle). The…

The pair steadies after two profitable days and intense central bank activity, unfazed by today’s Eurozone CPI figures

The Turkish lira dropped to record lows against the dollar after its central bank lowered its repo rate by 100bps to 14% yesterday. This is despite an inflation rate that has surged in 2021 to above 17%. Moreover, the inflation rate has ticked up in recent months after the bizarre implementation of monetary policy, which flies in the face of traditional economic theory. The weekly chart below displays the capitulation…

The pair saw a surge in volatility during yesterday’s Fed monetary policy decision, but ended the day higher and today it extends gains with an eye on the ECB

As we head into the next tightening cycle, it is informative to consider the relationship between the dollar and gold. To this end, below is the weekly relative strength chart of FXCM's USDOLLAR basket and our XAUUSD instrument. The chart has a cyclical component to it. Between 2011-2013, the ratio formed a base or accumulation pattern (first green rectangle). When this completed, the greenback appreciated against the precious metal in…

The dollar's momentum has slowed as we head towards the FOMC statement release tomorrow (15 December) at 7:00 pm GMT. This is to be expected, as the tone of the statement will be a key focal point for market participants. However, December has been a less volatile month for the greenback. At the time of writing the December range of FXCM's USDOLLAR basket is only about 35% of November's range.…

The pair extends yesterday’s losses since broader sentiment was cautious overnight, but finds support as we head towards the open of European markets

The pair starts the week on the back foot, as the US Dollar attracts flows, following Friday’s negative reaction the US inflation figures

The week starts on the back foot, as fresh Omicron warning in the UK weigh on the Pound, following Friday’s US CPI-fueled rebound

The pair is steady today, in appositive week so far, as markets brace higher for higher Consumer Price Index (CPI) in the US