US dollar pressured by Euro and Swiss franc. EUR and CHF supported by data and a rate hike

The EUR/USD is forming its seventh consecutive bullish candlestick on the daily timeframe. This morning's price again renewed its weekly and monthly high and is 0.35% higher than the daily open price. Investors continue to ditch the US Dollar as other currencies become more attractive. The Dollar has come under pressure from the liquidity crisis and the Fed’s dovish tone.

✕Chart, waterfall chart Description automatically generatedEUR/USD 2-Hour Chart on March 23rd

The Dollar is specifically under pressure from the Euro and the Swiss Franc. Both currencies were supported by stable economic figures and also a 50 basis point hike. This morning the USD/CHF moved 0.60% in favour of the Franc after the Swiss National Bank hiked a further 0.50%, double that of the Fed.

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This morning the USD/CHF moved 0.60% in favour of the Franc after the Swiss National Bank hiked a further 0.50%, double that of the Fed

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Most economists and analysts have advised investors to look for alternatives to the Dollar, including other currencies, cryptocurrencies, and safe haven assets. Investors have expressed dissatisfaction with the US financial system and Powell’s comments on the “uncertain economic future.” So far, investors have opted for other currencies where the Central Bank has taken a more hawkish tone. This includes the Euro and the European Central Bank. On the other hand, technical analysts are concerned about the Dollar being undervalued in the short term.

Summary of the update by NAGA:

• The Federal Reserve increases interest rates by a further 0.25% but signals an “uncertain economic future.”

• Treasury Secretary, Janet Yellen, confirmed there are no such discussions or plans to introduce any kind of additional deposit guarantees.

• The NASDAQ increased during this morning’s Futures Market but experienced a strong selloff after yesterday’s Powells-Yellen press conference.

• Investors favour other currencies and safe haven assets over the Dollar due to a weak hike and uncertainty.

Read the first part here and the second part here.