Interest rates in Europe were cut in June, while the BoE is expected to push its rate cut back until after the UK election. For the US, one cut is indicated this year, and now the question is when it will arrive. As a result, could we see US dollar strength in the near term? Here are some key aspects to keep an eye on in July: On July 2, Fed Chair Powell will be giving a speech. It may be something to keep an eye on for comments on US interest rates. The EUR and GBP recently hit long-term upper downtrend lines, suggesting potential US dollar strength ahead. Once again, it was another month w ..read more

The question going into June is when central banks in the US, UK, and Europe will move to cut rates. Given the recent hotter-than-expected inflation data in the US, investors have had to reconsider when the first cut will arrive and how many (if any) there will be this year. Here are some key aspects to keep an eye on in May: The US dollar has weakened against many of the other major currencies in May. However, any talk of higher rates for longer could see some money flow back into the greenback. The EURGBP had just dropped to its lowest level since August 2023 intraday earlier this week. Ho ..read more

As we head into May, whether the US Federal Reserve will or won’t cut interest rates this year has been a primary topic, especially following the latest inflation data. With some traders speculating that the Fed won’t cut rates, we saw the USD gain some ground in April. However, with an interest rate decision coming on May 1, it should hopefully provide some clarity going forward. Here are some key aspects to keep an eye on in May: As mentioned, the US Federal Reserve interest rate decision will be on Wednesday. Given the constant talk about potential rate cuts, this is something to monitor ..read more

The Bank of Japan (BoJ) increased its Policy Rate to +0.00%/0.10% in March, pulling the rate out of negative territory. While many, including the Research Team at FP Markets, expected the Japanese yen (JPY) to rally on the back of this, we instead witnessed a fall in the currency, consequently drawing the USD/JPY higher. Many desks labelled the move as a dovish hike due to the BoJ offering limited forward guidance regarding further policy firming. BoJ Intervention Has Traders Nervous The depreciation in the JPY is causing concern for the BoJ, with warnings coming from the central bank about a ..read more

As we head into April, assessing how the economy is fairing and what could shake up the forex market is important for traders. By keeping an eye on economic data and chart movements, we can get a better handle on what might unfold in the forex markets for the month ahead and what to watch out for.  Here are some key aspects to keep an eye on in April: Comments from US Federal Reserve officials will be worth monitoring. The central bank maintained its forecast for three rate cuts this year, but they are monitoring the data, so comments on when rate cuts could occur will be important. One ..read more

  The GBPUSD currency pair faced another wave of selling pressure as the Bank of England (BoE) hinted at an easing cycle on the horizon, exacerbating the British pound’s weakening trend. The monetary authority, which held interest rates steady on Thursday, took markets by a surprise by signalling the advent of rate cuts in the near future. In a pivotal shift from its prior hawkish stance, the Bank indicated that looser monetary policy might soon be warranted, given the decrease in Britain’s inflation rate, which cooled from 4.0% in January to a more temperate 3.4% in February. This move ..read more

  The New Zealand Dollar (NZD) is currently balanced on a delicate fulcrum against the US Dollar (USD). NZDUSD is reeling close to the lows that haven’t been seen since late 2023. The currency pair’s proximity to these levels signals a heightened sensitivity to the ongoing concerns regarding U.S. interest rates, particularly as traders grapple with the implications of the upcoming U.S. Federal Reserve decisions. Despite no anticipated changes to the Federal Funds Rate in the imminent FOMC Statement, the financial market’s nerves are on edge. There persists a tangible nervousness stemming ..read more

  In early trading on Tuesday, USDZAR felt the pressure of an intensifying global financial environment as the U.S. dollar gained strength, resulting in a dip for the South African Rand. Market participants are treading cautiously ahead of the Federal Reserve’s imminent monetary policy decision, an event that invariably sends ripples across worldwide currency valuations. By 0625 GMT, the rand was observed to trade at 19.0200 against the dollar, marking a 0.4% retreat from its preceding close. This move underscores the sensitivity of the South African currency to international monetary cu ..read more

  After maintaining a negative interest rate policy for eight years, the Bank of Japan (BoJ) has shifted gears by raising the benchmark interest rate into a positive range of 0% to 0.1%. This move marks a historical pivot for the central bank, as it represents the first rate increase by the BoJ in 17 years. Despite markets having partially priced in the possibility of a rate hike with a 44% expectation, the actual decision on the increase still managed to cause a stir. The precursors to the BoJ’s decision had not gone unnoticed, with Nikkei Asia pre-emptively leaking the potential move ..read more

In the very fabric of the foreign exchange market, anticipation can cause as much movement as action itself. The USD/JPY currency pair unveils a scenario that portrays the economic interplay between subtle cues and significant proceedings, weaving a tale of expectation and pre-emptive market behaviour. Current market projections for the USD/JPY pair demonstrate a modest upside potential, but some participants have their sentiments measured and their decisions on hold as they anticipate pivotal meetings of two of the world’s leading central banks – the Federal Reserve of the United States (Fed ..read more