FX MONETARY POLICIES by Stewart Richardson


The Dollar is key in the short term but the big cycles are turning cautious


In the last few weeks, we have mentioned the concept of the totality of monetary policy. Everyone focuses on interest rates, but monetary policy is more than that. We need to look also at money supply, the yield curve


44 FX TRADER MAGAZINE July - September 2018


as well as rates, the Fed’s balance sheet and the direction of the US Dollar to get an overall sense of monetary conditions. A number of commentators will make the point that with US rates at only 2%, how can there possibly be


bad times ahead; surely rates would have to reach 5% or more for something nasty to happen? Perhaps they are right, but if we


accept the argument that


we need to look at the totality of monetary policy, along with


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