The weekly figures on traders' futures commitments obtained from the Chicago Mercantile Exchange's International Monetary Market shed valuable light on the developing flows pursuing one currency versus another.
Rather than simply comparing currencies' overnight interest rates, FX traders pay close attention to differentials in 10-year yields for the market's assessment of longer term interest/inflation rate horizons. The relationship is straight forward.
Interest rates are the single most important fundamental driver in Forex and the direction of monetary policy is essential in shaping developments in currencies. This direction is determined by the vast array of economic reports, central bank rhetoric and movements in equity and bond markets.
As the US jobs report beat expectations in the way of NFP with 175K, here is a look at these rare charts patterns in USDJPY, 10-year yields and AUDCAD. Full charts & analysis
Latest Hot-Chart - Jan 16
Commodity Currencies Look-Ahead
CAD – The loonie took an ugly turn to the worst in H2 of last year on a combination of persistent downward revisions from the Bank of Canada and the appointment of Stephen Poloz as new...