Abstract:The US Dollar Index (DXY), reflecting the US dollar’s value against a basket of foreign currencies, has recently faced a bearish streak, settling near its lowest point during the Asian trading session on Thursday. Despite this decline, it has retained some of its gains for the week, reaching an almost 11-month high earlier this week. Traders are eagerly awaiting signals regarding the Federal Reserve’s upcoming policy decisions.
The US Dollar Index (DXY), reflecting the US dollar‘s value against a basket of foreign currencies, has recently faced a bearish streak, settling near its lowest point during the Asian trading session on Thursday. Despite this decline, it has retained some of its gains for the week, reaching an almost 11-month high earlier this week. Traders are eagerly awaiting signals regarding the Federal Reserve’s upcoming policy decisions.
On Wednesday, the US ADP report revealed that private-sector job additions in September were a meager 89,000, a substantial drop from Augusts revised 180,000 and below market expectations. This disappointing data, coupled with a decrease in the US ISM Services PMI from 54.5 in August to 53.6 in September, has prompted the Fed to reconsider further interest rate hikes. Consequently, US Treasury bond yields have decreased, prompting some profit-taking in the USD.
Despite these developments, recent statements from several Fed officials suggest a commitment to continued policy tightening to combat inflation and return it to the 2% target. This aligns with the Feds hawkish outlook, and the expectation remains for at least one more rate increase by year-end. These factors are likely to limit any further decline in US bond yields and support the USD, urging caution among bearish traders.
Investors are also likely to remain cautious ahead of Friday‘s release of the eagerly awaited US monthly jobs data, known as the Nonfarm Payroll (NFP) report. This report will heavily influence market expectations regarding the Fed’s future rate hike trajectory and the near-term direction of the USD.
In the meantime, Thursday‘s release of weekly Initial Jobless Claims data from the US, along with fluctuations in US bond yields, is expected to generate market momentum during the early North American trading session. This data will offer insights into the labor market’s health, a key factor in the Feds policy decisions.
In conclusion, although the USD Index is currently experiencing a downward trend, several factors, including the potential for further Fed policy tightening and expectations of more rate hikes, are mitigating the decline. Market participants are eagerly awaiting key data releases to gain fresh insights into the Fed‘s future actions, which will significantly influence the USD’s trajectory.
This article outlines the history of Ponzi schemes, highlighting the infamous Charles Ponzi, Bernie Madoff, and beyond.
The forex market presents both opportunities and challenges, with technical analysis being crucial for successful trading. This article outlines the five essential steps for mastering Forex MT4 technical analysis: identifying trends, utilizing technical indicators, determining entry and stop-loss points, analyzing price charts, and performing real-time monitoring and adjustments. By following these steps, traders can enhance their understanding and application of technical analysis, ultimately improving their trading accuracy and success rate.
Wednesday's major data releases and macroeconomic events are expected to cause volatility to increase after another day of erratic trading in the financial markets. The Spring Budget for the UK will be released, and January Retail Sales figures for January will be made available by Eurostat. ADP Employment Change for February and January JOLTS Job Openings will be discussed later in the session on the US economic docket.
Major currency pairings are still trading in familiar ranges early on Tuesday after the erratic trading on Monday. The US economic docket for the American session will include the factory orders data for January and the ISM Services PMI survey for February. Final updates to the February PMI for the US, Germany, the UK, and the EU will also be released by S&P.