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Talking Points:
• Monetary policy expectations are one of the primary fundamental drivers for the FX markets currently
• We have seen the ECB cut rates, the BoE upgrade its hike time frame and Yellen cool Taper fears
• Stimulus and rate forecasts have a very real impact on short and medium-term setups on pairs like EURUSD
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What sent the EURUSD tumbling these past two weeks or sparked the GBPUSD rallying today? Monetary policy expectations. As the outlook for central bank plans evolve, the market can project changes in interest rates as well as the supply-and-demand of a currency. We know that this can alter economic activity and investor confidence levels, but for FX traders it can also define a material value shift in a currency against its counterparts. In today's Strategy Video, we discuss how to incorporate monetary policy analysis into your trading and look at where the dollar, euro, pound and yen all stand now.
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