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.
Euro lifted on a wire story from unnamed ECB sources that any “action [from next week's ECB policy meeting is] unlikely next week". But watch Friday's Eurozone flash Aug CPI figures. More charts & analysis.
Latest Hot-Chart - Jun 12
World Cup & Market Patterns
9 of the last 13 World Cup tournaments elapsed during a period of falling stocks, with an average decline of 6% from the first to the final match. But see what happens in post-WorldCup Octobers.
ECI Enforces USD Dynamics
Despite the several US economic releases this week (July ADP on private sector jobs, Q2 GDP, Fed decision and July non-farm payrolls and unemployment), the Q2 employment cost index released on...