Key Indicators Forecast US Dollar Gains, Losses for AUD NZD CAD

November 16, 2015 - Written by James Fuller

STORY LINK Key Indicators Forecast US Dollar Gains, Losses for AUD NZD CAD

VIX High on Damp Trader Risk Appetite, Paris Attacks to Send VIX Higher?

The old share market adage which states that ‘when VIX is high, it’s time to buy’ could potentially come to the fore this week.

VIX measures the volume and number of protective ‘put’ orders placed by equities traders when they strike share deals in the US and is a closely-monitored gauge of fear levels in the market.

The maxim therefore means that the time to buy shares is when fear levels are increased.

Last week’s session saw the VIX chart close at above the 20.0 threshold for the first time in six weeks and the terrorist atrocities which took place over the weekend in Paris have the potential to send this key indicator higher.

If this comes to pass, then expect global share markets to slump and the export-driven Commodity Dollars – the Australian Dollar (currency : AUD), New Zealand Dollar (currency : NZD) and Canadian Dollar (currency : CAD) - to follow suit.

US Dollar Forecast to Perform Strongly This Week

Meanwhile, one currency is forecast to perform strongly during this week’s session – the US Dollar (currency : USD).

The Buck continues to benefit from investors’ expectations that, in spite of continued evidence of a pronounced slowdown in China and low levels of inflation Stateside, the Federal Reserve is likely to raise its headline interest rate next month for the first time since the 2007 – 09 financial crisis.

US Consumer Prices and Federal Reserve Minutes to Provoke US Dollar Volatility This Week

As of close of business on Friday, futures markets were pricing-in a 69.8% chance that Fed rate ‘lift-off’ will take place this side of Christmas.

The next two days could be seminal for the Greenback, with October’s Consumer Price Index data out tomorrow afternoon and Wednesday evening bringing the publication of the minutes of the most recent Federal Reserve FOMC monetary policy meeting.

Any allusion to ‘global headwinds’ from the Fed’s rate-setters could be viewed as coded signal that the US economy is not ready for a tightening of policy.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Daily Currency Updates