HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
Exness information and reviews
Exness
86%

Dollar's retreat propels S&P 500 to new record


8 February 2024

Raffi Boyadjian   Written by Raffi Boyadjian

Dollar weakens despite Collins pushing back on rate cut bets

The US dollar continued pulling back against most of its major peers on Wednesday, gaining only against the yen and the franc. The main gainer was the kiwi, perhaps as New Zealand’s better-than-expected jobs data prompted investors to scale back their RBNZ rate cut bets. The greenback seems to be stabilizing today, while extending gains against the yen.

Once again, there was no fundamental catalyst for the dollar’s weakness. On the contrary, one more Fed official joined the chorus of those pushing back against imminent rate reductions. Following Powell, Mester and Kashkari, it was the turn of Boston Fed President Susan Collins to share her view, noting that for the moment, policy remains well positioned.

Collins’ comments did not impact the market’s view on US interest rates either. The March cut probability stayed at nearly 20% and the total number of basis points worth of reductions for the whole year remained around 120.

This, combined with the fact that Treasury yields rose somewhat, suggests that dollar buyers continued realizing profits, perhaps preferring to wait for the next entry opportunity at more attractive levels. Following the astounding US jobs report on Friday, the dollar index jumped above its 200-day exponential moving average and now it is pulling back, maybe to test that average as a support.

What could prompt dollar traders to buy again near that zone might be next week’s US CPI data for January, as stickier than expected inflation could take the likelihood for a March rate cut closer to zero and possibly reduce the elevated 80% probability for such action in May.

Yen tumbles on Uchida’s remarks, Chinese stocks extend recovery

The only currency against which the dollar managed to perform well was the Japanese yen, which may have come under selling interest after BoJ Deputy Governor Shinichi Uchida said that the Bank will likely avoid raising interest rates rapidly, even after they exit negative territory.

Although Uchida signaled conviction that the conditions for phasing out stimulus are falling into place due to rising prices, investors are not fully convinced that the era of negative interest rates will end in April. The April meeting will be the first after the “Shunto” wage negotiations, where firms and unions are expected to agree on another strong pay hike. Market participants assign a 68% chance for a rate increase to 0% in April, while such a move is fully priced in for June.

The Chinese yuan rose yesterday, and it is holding steady today despite data revealing that consumer prices fell at their fastest pace in more than 14 years in January. Perhaps the currency received support from the Chinese stock market, which extended its recovery as regulators intensified efforts to stabilize the market by placing further curbs on short selling.

The head of China’s securities regulator was replaced on Wednesday as policymakers struggled to stabilize the market, while according to Bloomberg, the Regulatory Commission will soon update President Xi Jinping on market conditions.

S&P 500 hits new record, oil extends recovery

Wall Street traded in the green yesterday, with the Nasdaq rising almost 1% and the S&P 500 climbing to new record highs. The optimism surrounding this earnings season seems to have overshadowed jitters surrounding US regional banks after Moody’s downgraded New York Community Bancorp to junk. The dollar’s retreat may have also helped, despite investors not altering their US interest rate bets.

The slight rise in Treasury yields and the dollar’s retreat may have acted as offsetting forces for gold which traded virtually unchanged yesterday. The precious metal is slightly lower today, which suggests that it did not attract safe haven flows either after Israel rejected a ceasefire offer from Hamas.

Nonetheless, the Middle East news was noticed by oil traders, who continued buying on fears that the conflict will continue disrupting supply. On the demand side, the stronger-than-expected drawdown in US gasoline stocks may also have added support.

by XM.com

#source


RELATED

Fed cut expected, market reaction hinges on multiple factors

Fed meeting today; rate decision at 18:00 GMT, Powell speaks 30 minutes later; A 25bps cut is expected but details matter for markets, particularly the dot plot; Powell expected to follow the Jackson Hole script; all eyes on possible signals about October.

17 Sep 2025

Dollar drops as Fed rate cut looms

US dollar and Treasury yields drop ahead of Fed decision. President Trump urges Powell to deliver bigger cut. Pound up after jobs data, yen gains on BoJ hike bets. S&P 500, Nasdaq and gold hit new record highs.

16 Sep 2025

Risk sentiment on the mend as investors gear up for Fed decision

A defining week has just started, with investors counting down to Wednesday’s pivotal Fed meeting.

15 Sep 2025

Risk appetite improves but investors stay vigilant

Dollar and US equities rally; crypto market is indecisive; Volatility remains elevated despite improved risk sentiment; US PPI data could show tariff impact ahead of CPI report; Gold and oil are supported by broader geopolitical tensions.

10 Sep 2025

Fragile risk appetite as US data boost Fed cut bets

Softer US jobs data leave door open for a larger Fed rate cut; Dollar and US equities try to find their footing today; Yen under pressure after PM Ishiba’s resignation; Gold and oil rally, supported by weaker dollar and geopolitical tensions.

8 Sep 2025

Risk appetite firms up as investors anticipate softer US data

Risk sentiment improves, dollar slightly under pressure; Gold holds gains, bond yields ease across the board; Today’s NFP could determine the size of the Fed rate cut; Decent market reaction if jobs data delivers a strong upside surprise.

5 Sep 2025

Risk markets jittery as expectations for soft US data mount

Risk sentiment remains fragile ahead of the first batch of key US data; Gold and rising bond yields continue to unnerve investors; ADP report and ISM Services PMI might open the door to a 50bps Fed cut; Fedspeak to intensify, markets to digest Miran’s hearing headlines today;

4 Sep 2025

Calm before the storm in markets ahead of pivotal US data

Dollar on the back foot, equities remain wobbly; Court battles in focus after Friday’s tariffs ruling; Investors prepare for critical US data; all eyes on Friday’s jobs report; Uncertainty boosts gold and silver.

1 Sep 2025

Dollar extends slide as Bessent talks double rate cut

Dollar slips on increasing Fed rate cut bets. Treasury Sec. Bessent favors a 50bps reduction. Yen rallies on concerns about BoJ’s inflation metric. S&P 500, Nasdaq and Bitcoin climb to new record highs.

14 Aug 2025

Dollar slips as CPI data increase September Fed cut bets

US headline CPI holds steady, but core CPI accelerates; Still, the miss in the headline rate increases September cut bets; Gold slightly up, but traders remain cautious ahead of Trump-Putin talks

13 Aug 2025

Markets on edge, await US inflation figures

Muted risk appetite ahead of critical US inflation report; Strong CPI report could derail Fed rate cut expectations, boost the dollar; Gold and oil hold steady as Trump-Putin meeting nears; Aussie ignores RBA cut.

12 Aug 2025

Tariff and Fed developments weigh on dollar’s recovery

Muted risk appetite; equity indices edge higher, bitcoin struggles; August 12 deadline for US-China truce in the spotlight; Gold flirts with $3,400 as US prepares to tariff gold bar imports.

8 Aug 2025

Dollar suffers from Trump’s tariff announcements

Tariffs back in the spotlight; China could be next; Equities shrug off tariff headlines but dollar weakens; Gold rises despite progress made in the US-Russia talks; BoE to cut rates; pound’s performance hinges on degree of dovishness.

7 Aug 2025

Dollar seeks direction as Trump’s TV appearance could hurt risk appetite

Following a disastrous Friday for dollar assets, both the US dollar and US equity indices are showing tentative signs of life.

5 Aug 2025

US jobs data may challenge the dollar’s recent strength

Despite the eventful calendar so far this week – with the FOMC meeting and the various tech stock earnings standing out – market volatility had remained low until yesterday.

1 Aug 2025

Dollar rally pauses as Fed signals patience once again

Both the US dollar and US equity indices are trying to find their footing after the critical FOMC meeting.

31 Jul 2025

Dollar strength persists ahead of key events

Both the dollar and US equities start the week on a strong note; Euro suffers as European leaders challenge the US-EU trade deal; Gold retreat stalls; oil fails to materially benefit from Trump's Russia comments.

29 Jul 2025

Dollar on the defensive, seeks support

ECB pauses, raises the bar for September rate cut; Trump’s Fed visit proves uneventful, despite rate cut demand; Dollar losses mount this week, even the yen outperforms the greenback; Cryptos are on the back foot today; altcoins maintain sizeable gains.

25 Jul 2025

EU and US close to a trade deal ahead of ECB decision

After Japan, the US is nearing a trade accord with the EU. S&P Global PMIs in focus ahead of next week’s FOMC decision. ECB to stand pat, Lagarde’s signals to be key for the euro. S&P 500 hits a new record high, but earnings results come in mixed.

24 Jul 2025

Dollar strength undermined by Trump's Fed criticism

Trump firmly holds the keys to market volatility; A July rate cut is likely written off unless data turns negative; US Treasury yields have taken notice of Trump’s criticism of Powell; Pound benefits from euro’s troubles despite mixed UK data.

17 Jul 2025


Editors' Picks

How to Choose the Best Forex Advisor 2025

Key Factors to Consider When Choosing a Forex Advisor. Risk Management. Fees and Costs. Compatibility with Your Trading Style.

Automating Success: The Benefits and Risks of Using Forex Expert Advisors

This article explores the benefits and risks associated with using Forex Expert Advisors, providing insights into how traders can maximize their potential while mitigating potential downsides.

Best Forex Brokers 2025

By prioritizing factors such as overall rating, regulatory compliance, trading conditions and platform reliability traders can make an informed decision that aligns with their trading needs and aspirations, setting the stage for a potentially prosperous trading journey.

The Top Forex Expert Advisors 2024: Performance, Strategy, and Reliability Review

An annual roundup reviewing the most successful Forex Expert Advisors (EAs) based on their performance, strategies employed, reliability, and user feedback. This piece would provide insights into which EAs have been market leaders and why.

The Evolution of Forex Expert Advisors: Navigating the Path of Technological Revolution

The concept of automated trading has been around for decades, but the accessibility and sophistication of Forex EAs have seen significant advancements in the past few years. Initially, automated trading systems were rudimentary, focusing on simple indicators like moving averages.

Best Forex EAs – Forex Expert Advisors Rating

Expert Advisors (EAs) Rating features high-quality Free and paid Forex EA most popular on the market today.

FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Just2Trade information and reviews
Just2Trade
76%
FXNovus information and reviews
FXNovus
75%
Riverquode information and reviews
Riverquode
75%

© 2006-2025 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.