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Not a lot has modified since Friday. The USD has remained robust throughout the board, regardless of some preliminary volatility within the FX markets.
Initially, the Fed’s dovish stance led to a decline within the USD. Nonetheless, dovish actions from different central banks quickly adopted, prompting the greenback to rally whereas different currencies, notably the GBP and CHF, weakened.
The JPY can be below stress, as speculators are skeptical about any additional charge hikes within the close to time period. Nonetheless, a sudden shift in the direction of risk-off sentiment or FX intervention by Japan might bolster the JPY.
In commodities, each gold and are poised for potential declines, suggesting that commodity currencies might stay weak. The MXN, nonetheless, may not expertise any vital drop however might as a substitute transfer sideways. Inventory markets are following their very own trajectory, sustaining an uptrend, although the SP500 might encounter resistance because it approaches higher-degree fifth waves.
Within the US, the upcoming PCE launch on Friday is noteworthy. Nonetheless, robust information could also be ignored by the market, on condition that Powell and the Fed appear unconcerned by the latest modest uptick in inflation, probably anticipating three charge cuts this yr. It is also value noting that market exercise would possibly gradual in the direction of the tip of the week as a result of holidays within the EU.
Turning to the DXY, its power continues, although some intraday corrections might happen quickly. Help lies within the 103.90-104.00 space.
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