VFX Financial ’s Post

CURRENCIES FOCUS - JUNE 2024❗️ By Guy ERTZ 📖🖊️ Summary 1️⃣ The US dollar index (DXY) depreciated 1.6% in May while the Euro index (EXY) remained flat. Currency volatility remained low. The market is positioning for wider swings as elections in the US approach (November 2024). 2️⃣ In the US, we still see one rate cut in 2024 in September. We forecast 4 cuts in 2025. The Europe the ECB announced its first rate on June 6th. We still anticipate two more rate cuts this year, and three cuts in 2025. We maintain our 3-month EURUSD target at 1.06 due to election uncertainty in Europe and keep our 12-month target at 1.12. 3️⃣ With low volatility in the FX market, the Mexican Peso should remain strong on the back of carry trades. The yield differential is likely to continue to be supportive. We now expect Mexican rates to reach 9.75% (vs 9.5% previously) late 2024. Relative political stability and nearshoring momentum also support the MXN. We decrease our USDMXN 3-month target from 17.5 to 17 and our 12-month target from 18.5 to 17.5. That suggests less depreciation potential for the MXN. 4️⃣ The yield differential supported the USD relative to the Yen (JPY) over recent months. Support for the JPY should come later this year as the Fed is set to cut rates and the BoJ to gradually increase the policy rate (as of September). We maintain our USDJPY 3-month target at 150 and our 12-month target at 140 (value of one US dollar). Enjoy this exciting read📖❗️ #bnpparibas #wealthmanagement #privatebanking #markets #economy #strategy #articles BNP Paribas Wealth Management - Private Banking

Currencies More Subdued (Apart from Yen) - https://lnkd.in/eMX6ZmGr - Last week was a far more subdued week as market eyes were elsewhere. Global markets rallied pushing stocks to new highs in Europe and US markets posting substantial gains. The post Currencies More Subdued (Apart from Yen) first appeared on trademakers. The post Currencies More Subdued (Apart from Yen) first appeared on JP Fund Services. The post Currencies More Subdued (Apart from Yen) appeared first on JP Fund Services. - Cromwell FX

Currencies More Subdued (Apart from Yen) - https://lnkd.in/eMX6ZmGr - Last week was a far more subdued week as market eyes were elsewhere. Global markets rallied pushing stocks to new highs in Europe and US markets posting substantial gains. The post Currencies More Subdued (Apart from Yen) first appeared on trademakers. The post Currencies More Subdued (Apart from Yen) first appeared on JP Fund Services. The post Currencies More Subdued (Apart from Yen) appeared first on JP Fund Services. - Cromwell FX

Currencies More Subdued (Apart from Yen) - https://lnkd.in/eXGRhTF8 - Last week was a far more subdued week as market eyes were elsewhere. Global markets rallied pushing stocks to new highs in Europe and US markets posting substantial gains. The post Currencies More Subdued (Apart from Yen) first appeared on trademakers. The post Currencies More Subdued (Apart from Yen) first appeared on JP Fund Services. The post Currencies More Subdued (Apart from Yen) appeared first on JP Fund Services. - Cromwell FX

The U.S. dollar is trading above last week's high against most G10 currencies, with the yen being a notable exception. Bank of Japan Governor Ueda's comments on raising rates have supported the yen, causing the dollar to reverse gains. Antipodean and Scandinavian currencies are weakest in the G10 while emerging market currencies are under pressure except for the Russian ruble and Mexican peso. The Chinese yuan has softened. Equities are generally lower, with mixed results in Japanese and Chinese indices. India's market rally continues for an 11th session. European and U.S. markets are under pressure, with Japan's 10-year yield above 0.90% and European benchmark yields slightly softer. Gold is hovering around $2500, while oil prices continue to decline. Japan's consumer prices rose, unemployment increased, and industrial production showed recovery. Australia's Q2 GDP, household spending, and trade figures were influenced by the Reserve Bank's hawkish stance. China's PMI data showed weakness, with speculation of new Beijing initiatives supporting growth. The eurozone and UK's final August PMI readings show a slight decline in core rate inflation, with the Swiss National Bank expected to cut rates again. Euro and sterling are under pressure, testing key support levels. The U.S. dollar and rates rose in the Americas last week, with markets focusing on upcoming employment data. The Fed is expected to cut rates at its next meeting, with potential for a larger-than-expected move. Canada is likely to see its third rate cut, Mexico's peso faces political risks, and the Brazilian real has been volatile. #Forexnews #News #USDollar

Currencies More Subdued (Apart from Yen) - https://lnkd.in/eRiRKyTX - Last week was a far more subdued week as market eyes were elsewhere. Global markets rallied pushing stocks to new highs in Europe and US markets posting substantial gains. The post Currencies More Subdued (Apart from Yen) first appeared on trademakers. The post Currencies More Subdued (Apart from Yen) first appeared on JP Fund Services. The post Currencies More Subdued (Apart from Yen) appeared first on JP Fund Services. -

#USD index rebounded following release of strong US #nonfarm payroll report. Most markets lost ground versus the USD, but the hardest hit were the #commodity currencies, with the #AUDUSD experiencing significant weakness as it approached the lowest closing level on August. Since October, AUD remained under pressure, showing weakness despite the absence of a clear risk-off sentiment. In our view, the #tariff-related risks, particularly with China, are amplifying uncertainties for commodity-linked currencies. Aussie has emerged as the worst performer among them, plagued by concerns of renewed US-China trade tensions and a lackluster domestic economic outlook. Market expects a possible acceleration in RBA’s easing cycle, though it’s still on 2025. #RBA last meeting is due on tomorrow. The expected range for today is between 0.6373 support and 0.6445 resistance. #fx #hedging #riskmanagement #currency #forecast

The U.S. dollar is trading above last week's high against most G10 currencies, with the yen being a notable exception. Bank of Japan Governor Ueda's comments on raising rates have supported the yen, causing the dollar to reverse gains. Antipodean and Scandinavian currencies are weakest in the G10 while emerging market currencies are under pressure except for the Russian ruble and Mexican peso. The Chinese yuan has softened. Equities are generally lower, with mixed results in Japanese and Chinese indices. India's market rally continues for an 11th session. European and U.S. markets are under pressure, with Japan's 10-year yield above 0.90% and European benchmark yields slightly softer. Gold is hovering around $2500, while oil prices continue to decline. Japan's consumer prices rose, unemployment increased, and industrial production showed recovery. Australia's Q2 GDP, household spending, and trade figures were influenced by the Reserve Bank's hawkish stance. China's PMI data showed weakness, with speculation of new Beijing initiatives supporting growth. The eurozone and UK's final August PMI readings show a slight decline in core rate inflation, with the Swiss National Bank expected to cut rates again. Euro and sterling are under pressure, testing key support levels. The U.S. dollar and rates rose in the Americas last week, with markets focusing on upcoming employment data. The Fed is expected to cut rates at its next meeting, with potential for a larger-than-expected move. Canada is likely to see its third rate cut, Mexico's peso faces political risks, and the Brazilian real has been volatile. #Forexnews #News #USDollar

Today's forex market is showing varied performance across different currency pairs. For instance, the Canadian Dollar (CAD) has seen mixed results against other major currencies. It's slightly up against the Japanese Yen (JPY), Australian Dollar (AUD), and New Zealand Dollar (NZD), but it has declined against the US Dollar (USD), Euro (EUR), British Pound (GBP), and Swiss Franc (CHF). For example, CAD/JPY is up by 0.42%, while CAD/USD is down by 0.12%【7†source】. In other trends, the Australian Dollar is generally weaker today, decreasing against most of its counterparts including the USD, EUR, GBP, and CHF. For instance, AUD/USD is down by 0.46% and AUD/EUR by the same percentage. Similarly, the New Zealand Dollar (NZD) is also trending downwards against several major currencies like the USD and EUR【7†source】. Significant forex news includes the Bank of Japan's rate hike for the first time in 17 years, eliminating its yield curve control program, which is expected to influence the market significantly. The Federal Reserve's decisions are also highly anticipated, with Vanguard suggesting there may not be a rate cut this year. Additionally, the 10-Year Treasury Yield has closed at its highest level since November, and Crude Oil prices have reached their highest since November as well【8†source】. This dynamic movement in the forex market can be attributed to various geopolitical and economic factors influencing investor sentiment and currency values. Keep an eye on these developments as they could further affect market trends and currency pair values.

Implications of USD Appreciation Since the beginning of 2024, there has been a notable appreciation in the value of the USD. It has risen against all major global currencies, prompting concern among central banks and governments worldwide. As the predominant reserve currency, the US dollar’s influence is significant. The US Dollar Index, gauging the dollar against six key currencies, has seen an approximate 4% increase in January. Throughout this year, the dollar has strengthened against nearly all major currencies. Why is the dollar strengthening? The Federal Reserve has maintained interest rates at their highest in over 20 years, as inflation continues to exceed the 2% target. This has been a key factor in strengthening the dollar. The Fed has held the benchmark interest rates steady at 5.25–5.50% for the sixth consecutive meeting, which has bolstered investments in Treasury bonds and propelled US equity markets to trade at all-time highs. Moreover, the latest geopolitical tensions in the Middle East have prompted investors to turn to the security of the US dollar. How does this impact us? A stronger dollar signifies that the currency on the other side of the trade is weakening. Since the beginning of 2024, currencies such as the rupee, euro, and yuan have depreciated. This depreciation raises the cost of imports, as international trade is often conducted in dollars. Consequently, this leads to increased inflation in countries that rely heavily on importing a variety of goods and services. India, importing over 85% of its crude oil, faces inflation risks when the rupee weakens. The Reserve Bank of India often sells dollars to support the rupee, but this has limitations as India’s forex reserves have fallen for three consecutive weeks. Additionally, a robust dollar complicates the repayment of dollar-denominated debts for companies, as it costs more in rupees. On the other hand, exporters of goods and services benefit from a strong dollar, which results in increased revenues for them. According to labor market data, the US economy is showing strong performance, suggesting that the Federal Reserve may soon soften its approach to interest rates. Analysts anticipate a possible rate reduction by 50 basis points, with expectations for this positive trend to persist at least through the latter half of 2024. Read on medium: https://lnkd.in/g8WdtPhN