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The surprise move in the Forex markets
Saxo Bank’s traders say that markets seem “nervous” and are in a "wait-and-see mode" before the outcome of the Fed's meeting where we could get more news on when its quantitative easing programme might end.
The dollar index hit a five-week trough earlier this week as investors bet the Fed would reassure markets that interest rates would remain low for a long time even if it started scaling back stimulus this year. What is perhaps more of a surprise is that despite EURUSD moving higher, Saxo Bank traders are seeing more buying interest in downside Euro:Dollar and that's where they're looking for moves over the next few days.
In terms of trends, the traders are seeing Dollar Yen volumes are getting paid up, and that people are buying downside Euro Dollar.
The Aussie Dollar also remains under pressure after Reserve Bank of Australia governor Glenn Stevens implied the central bank needed to cut interest rates.
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