HFM information and reviews
Octa information and reviews
FXCC information and reviews
FxPro information and reviews
FXCM information and reviews
Vantage information and reviews

Fed supports dollar rally

28 September 2023 Written by Stephane Dubois  Senior Market Analyst Stephane Dubois

The US dollar index, DXY, is rigorously testing the resistance at the 106.00 level, with traders dissecting every nuance of the comments made by the Federal Reserve (Fed) officials concerning the trajectory of US monetary policy. Neel Kashkari, the President of the Federal Reserve Bank (FRB) of Minneapolis, recently emphasized the resilience of the US national economy to the current policy maneuvers, suggesting a likely necessitation of rate augmentation to anchor inflation sustainably to the 2% target.

Fed supports dollar rally

Concurrently, Austan Goolsbee, the head of the Chicago Fed, highlighted the persistent inflationary pressures as a predominant economic quandary over the implications of monetary policy tightening. The overarching sentiment from the officials denotes a potential interest rate elevation, looming in the horizon despite the stabilization at 5.50% in September.

Trade Strategy: BUY STOP 106.00/TP 106.60/SL 105.80

EUR/USD: Protracted Policy Stance

The EUR/USD pair hovers around 1.0550 as market participants meticulously evaluate Christine Lagarde’s, the head of the European Central Bank, remarks. Lagarde posited that the existing interest rate regime is pivotal for recalibrating inflation back to the 2% threshold, necessitating sustained elevated levels. This lends to a predominant conjecture of an impending shift away from further monetary tightening, accentuated by the escalating issues of economic deceleration in the Eurozone eclipsing the inflation conundrum. A prevailing anticipation is hinting at the ECB initiating rate cuts by June 2024, potentially perpetuating the Euro’s downtrend.

Trade Strategy: SELL STOP 1.0550/TP 1.0450/SL 1.0580

GBP/USD: External Factors Dictating Movements

The GBP/USD pair is navigating towards the support at 1.2100, with notable economic releases being sparse, leaving the currency movements at the mercy of exogenous variables. A consensus among preeminent economists indicates a pause in the tightening cycle by the Bank of England, with the interest rate projected to be retained at 5.25% until at least July before a potential commencement of borrowing cost reductions.

Analysts from S&P Global Ratings project a continual sluggish economic growth in the UK, attributed to the elevated inflation and interest rates, exerting adverse ramifications on households and corporate entities. This confluence of factors portends sustained pressure on the pound.

Trade Strategy: SELL STOP 1.2120/TP 1.2000/SL 1.2160

Conclusive Overview

Market participants remain in a constant state of vigilance, scrutinizing policy frameworks and economic landscapes to navigate the intricacies of currency movements effectively. The diverse monetary stances by the Fed, ECB, and the Bank of England illustrate the multifaceted nature of global economies and the subsequent repercussions on currency valuations. Traders and investors alike continue to maneuver through this intricate tapestry, adapting strategies to align with evolving market conditions and policy outlooks.

Share: Tweet this or Share on Facebook


Analyzing the Future Trajectories of Gold
Analyzing the Future Trajectories of Gold

Gold continues to maintain a strong stance, currently trading near $2040. The market is witnessing consistent buying interest in gold, largely influenced by the weakening U.S. dollar and anticipations surrounding the Federal Reserve's monetary policy...

4 Dec 2023

European Markets Kick Off December with Optimism Amid ECB Rate Hike Speculations
European Markets Kick Off December with Optimism Amid ECB Rate Hike Speculations

European stock markets opened December on a positive note, continuing the upward trend witnessed in November. This surge in investor confidence is primarily fueled by expectations that the European Central Bank...

1 Dec 2023

Dollar Rallies Modestly From Recent Lows as Markets Anticipate PCE Inflation Data
Dollar Rallies Modestly From Recent Lows as Markets Anticipate PCE Inflation Data

The U.S. dollar has seen a slight uptick in early European trading, indicating a cautious recovery. Despite this, the greenback hovers near a three-month low, underscoring a tense anticipation in the financial markets...

1 Dec 2023

Crypto Market Dynamics: Navigating Periodic Pullbacks Amidst Growth Trajectory
Crypto Market Dynamics: Navigating Periodic Pullbacks Amidst Growth Trajectory

In the ever-evolving landscape of the cryptocurrency market, a minor pullback has been observed, with the market capitalization dipping by 0.5% in the last 24 hours to $1.42 trillion. This slight retraction is part of a larger upward trend that initiated in mid-October...

30 Nov 2023

Gold Navigates Cautious Waters Amid Central Bank Decisions and Economic Data
Gold Navigates Cautious Waters Amid Central Bank Decisions and Economic Data

As the year draws to a close, a collective breath is being held in financial markets. The final policy meetings of 2023 for the world's pivotal central banks - including the FOMC, ECB, BoE, BoC, and BoJ—are poised to adopt a wait-and-see approach...

28 Nov 2023

Gold’s Prospects Amidst a Shifting Monetary Policy Landscape
Gold’s Prospects Amidst a Shifting Monetary Policy Landscape

Gold's resurgence beyond the coveted US$2,000 threshold signals a notable shift in market sentiment, coinciding with the US dollar's stumble, which is headed for its most significant monthly retreat in over a year...

28 Nov 2023

Editors' Picks

MultiBank Group information and reviews
MultiBank Group
FP Markets information and reviews
FP Markets
XM information and reviews
Just2Trade information and reviews
AMarkets information and reviews
IronFX information and reviews

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.