A significant drop in the volatility index

One of the major headlines in this week’s latest roundup of online Forex trading news revolves around a significant drop in the volatility index.

This is in stark contrast to recent weeks when this very same index hinted at a rather volatile Forex market.

Thus, many online trading analysts believe that there is little reason to expect major currency movements from a short-term perspective.

The drop in the volatility index comes on the heels of the rather sluggish non-farm payroll data from the United States. A report that many believe will highlight stalled American retail sales is also soon to be released. Still, many online Forex specialists feel that the dollar will likely continue to strengthen against other currencies for the remainder of the year and that the tapering policies enacted by the United States Federal Reserve will likewise remain unchanged.

Indeed, it is somewhat clear that the dollar may very well be trending towards a slow and continual rise. Such sentiment is mirrored by the fact that the Federal Open Market Committee recently pledged that it would cut a full $10 billion dollars off of its monthly bond purchases. This action is interpreted by some Forex trading professionals as a response to less volatility in the economy and decreased fears regarding any long-term stagnation.

Although the markets are set for less volatility as a whole, a notable exception can be seen in the prices of the pound. When the Bank of England recently announced that interest rates would remain unchanged, the pound suffered losses against most major currencies. Further falls may be observed when the Bank of England releases its inflation report; online Forex trading analysts are keen to see the net rate moves of the bank in recent times.

Notwithstanding this potentially significant news out of England, many online investors are moving away from any high-volatility trading strategies in favour of following trends in the longer term.

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