The US Dollar Strengthened As A Result Of The Hawkish Fed Rectification
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Stocks fell and the US dollar strengthened on Monday on a stronger than expected ISM services read in the US, which came in above expectations, and hinted that the economic activity, at least in the US services sector continues growing, and growing un-ideally faster-than-expected despite the Federal Reserve’s (Fed) efforts to cool it down.
The Aussie
In the FX, the Aussie was slightly better bid after the Reserve Bank of Australia (RBA) raised its rates by another 25bp today, and took the rates to levels last seen a decade ago.
EUR/USD and GBP/USD
But elsewhere, the US dollar strengthened as a result of the hawkish Fed rectification. The dollar index first eased to a fresh low since June, then rebounded. It has way to recover above its 200-DMA, which may mean that some majors, including EURUSD and Cable could return below their 200-DMA as well.
Yet, even if we see rebounds in the US dollar, the medium to long term direction of the dollar will likely be the south in the coming months.
The EURUSD could recover to 1.10, Cable to 1.30.
USD/JPY
More stretched… Vontobel sees the USDJPY’s fair value at 100, and Standard Chartered predict Bitcoin could fall another 70%, and spur a 30% rally in gold!
Watch the full episode to find out more!
- 0:00 Intro
- 0:25 Fed hawks are back
- 3:07 S&P500 could further fall
- 4:40 Selling USD rallies sounds like a plan
- 8:22 A 70% fall in Bitcoin could spur a 30% rally in gold?!
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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