Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
Evergreen buck inches down for a third day
On Monday, the evergreen buck kept diving for a third day in a row versus its counterparts on soaring bets the Federal Reserve will press the pause button on its rate lift cycle in the near months.
Despite firm monthly American jobs data for December the previous week, financial analysts are assured that the world's number one economy is actually losing momentum with Fed Chair Jerome Powell's remarks contributing to expectations that the US major financial institution might adopt a milder outlook.
On Friday, Fed Chair revealed to the American Economic Association that the major bank isn’t on a preset path of interest rate lifts and that it’s going to be quite sensitive to the downside risks financial markets are actually pricing in.
Versus a basket of its counterparts, the evergreen buck went down 0.25% hitting 95.92, which is close to a 2-1/2 month minimum recorded the previous week.
Soaring expectations that the major US bank is going to suspend its rate lift cycle is putting pressure on the greenback and that will be a crucial factor in the nearer future, as some market experts pointed out.
The evergreen buck managed to outperform other currencies last year because of the major US bank being the only key financial institution to lift interest rates. If the Federal Reserve holds interest rates this year, market experts see a slim likelihood of further greenback appreciation. This year, financial markets expect no more rate lifts from the major US bank.
Meanwhile, the common currency and the Australian dollar became the top performers, with the latter also deriving benefits from the weekend news of soaring policy stimulus in China.
The Australian dollar managed to surge by 0.5% trading at $0.7140.
The evergreen buck surged by 0.2% against the offshore Yuan reaching 6.8483.
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Have a look at the key financial instruments on Monday, February 28. Geopolitics is currently on all news frontlines. Western nations escalated sanctions on Russia for the invasion of Ukraine.
The Australian Bureau of Statistics will announce the updated Unemployment Rate and Employment Change data on Thursday, May 19, at 04:30 MT.
The UK Office for National Statistics will publish Consumer Price Index (CPI) data on Wednesday, May 18, at 09:00 MT.
The US Census Bureau will announce Core Retail Sales and Retail Sales on Tuesday, May 17 at 15:30 MT.