Forex Today: Sideways Markets on Gloomy Fed

Adam Lemon

Markets are seeing a small risk-off retracement.

  • Stock markets have moved sideways over the past day, with enthusiasm curbed due to comments from Jerome Powell about the U.S. recovery having a “long way to go”, gloomy coronavirus data, and worse-than-expected U.S. retail sales data.

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The yen is a popular asset during turbulent times.

  • The Australian dollar is clearly the weakest major currency, while the Japanese yen is the strongest, fitting the current “risk off” retracement.
  • Although political analysts generally concur President Trump has no way to remain in office, betting markets are still taking bets on the eventual certified winner, with President Trump implied a 5% chance of remaining in power.
  • I expect the Japanese yen to rise over this week as a reaction to last week’s fall, as the Japanese economy enjoys its fastest rate of economic growth in over 50 years.
  • The Turkish lira regained a lot of ground last week after its recent run of strong selling. Typical mean reversion suggests the lira is likely to continue falling over this week.
  • Markets will see a release of Canadian CPI (inflation) data later today.
  • Last Friday saw 660,906 confirmed new coronavirus cases diagnosed worldwide – a record high.
  • Coronavirus daily global death tolls are continuing to increase sharply to new highs far above the former record high made last April. Deaths in Latin America and the Caribbean continuing to fall, while rising strongly elsewhere, notably in Europe and in the U.S.A. The U.S.A. accounts for about 18% of global coronavirus deaths, Europe 47%, with Latin America at 19%.
  • The European Union is now seeing new coronavirus cases begin to fall, but is still more afflicted than any other geographical area, as lockdowns begin to have an effect. New cases in the E.U. are considerably higher than in the U.S., with a higher amount of deaths too. However, these numbers are still increasing in the U.S. while the rate of new cases is beginning to decline in the E.U.
  • Total confirmed new coronavirus cases stand at over 55.6 million with an average case fatality rate of 2.41%.
  • India has more than 8.9 million confirmed coronavirus cases, more than any other nation except the U.S.A. which has confirmed more than 11.3 million cases.
  • The rate of new coronavirus infections appears to now be increasing most quickly in Albania, Algeria, Azerbaijan, Bangladesh, Belarus, Canada, Croatia, Denmark, Estonia, Georgia, Greece, Hungary, Indonesia, Iran, Italy, Japan, South Korea, Kosovo, Lithuania, Malaysia, Mali, Moldova, Pakistan, Panama, Portugal, Russia, Serbia, Sri Lanka, Sudan, Trinidad, Turkey, U.S.A., Ukraine, and the U.K.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

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