The US Dollar has gained a stronger momentum at the beginning of the week against its peers to near the 20-year high mark. The currency was last seen trading at 104.54 in the index, having crossed 105 for a moment at the end of the previous week.
Investors sought safety amid rising concerns about global growth, while cryptocurrencies now look to gain some stability after a hectic week finally.
What is causing the worry is the doubt if the US Federal Reserve would succeed in controlling inflation without leading the country into a recession. Investors have taken shelter under the safe-haven currency for a while.
Global growth is under question due to the slow pace led by the crisis in Ukraine coupled with China’s zero-Covid policy that has already been termed unsustainable by authorities like the World Health Organization. Analysts from Barclays believe that the USD is getting stronger through the support of mounting global growth concerns.
Focus is also on events scheduled to happen in the days to come. The retail & production data and public remarks from Federal officials for the US are likely to be dropped on Tuesday. The same data is due from the Chinese side, with analysts estimating that a weaker outlook could force China to keep commodity G10 currencies under pressure. Forex could be tricky, considering a lot of global factors are involved. An expert’s advice backs the importance of one’s trading is indeed crucial. Traders should check out expert reviews of the best forex brokers before signing up for them.
Markets are bracing for the 50 basis points hike in the next two meetings of the US Fed; however, an increase of 75 basis points is still very much a part of the discussion. The same tone has been echoed by CME’s FedWatch tool.
Euro is closer to its lowest level, where it last stood in early 2017. The two factors that strongly affect the Euro’s price are its exposure to the Ukraine conflict and the US Dollar gaining strength. It was last traded at $1.0398, just above $1.0354, the lowest mark that Euro was at in early 2017.
GBP has gone down with Euro in the same boat to be at $1.2256, having touched the figure of $1.2156 in the previous week. Estimates show that it has been hurt softer than expected based on the GDP statistics for the first quarter.
Yen managed to gain in the first week but got soft to be at $129.43 per dollar due to the growing fears that US Treasury yields paused their March higher. Britain has lined up to publish its inflation, labor market, and consumer confidence data in the coming week.
Cryptocurrencies had a ride on the roller coaster in the week that just passed. Bitcoin almost closed the week with $21,400 before rebounding to $31,000. TerraUSD’s incident is gone, with the crypto market aiming to stabilize the ecosystem.