- The strong rise in the US Dollar has halted with a firm bearish retracement over the past day, after the greenback made record highs against the Euro and the Japanese Yen. The USD/JPY currency pair just kissed the round number at ¥145, the highest price seen since August 1998. The EUR/USD currency pair hit a new 19-year low at $0.9866, while the GBP/USD currency pair made a new 37-year low, but by barely a few pips, following the appointment of Liz Truss as the new Prime Minister of the UK. Despite its bearish retracement, there is a strong, long-term bullish trend in the US Dollar, and we are likely to see the currency continue to advance over the coming days.
- Markets are awaiting today’s monthly policy release from the European Central Bank, which is widely expected to hike its Main Refinancing Rate by 0.75% from 0.50% to 1.25%, with the key focus on its Monetary Policy Statement and the subsequent press conference by the ECB President Lagarde. This is likely to be a crucial day in the Euro, and we will probably see volatility in Euro pairs and crosses.
- The Bank of Canada raised its Overnight Rate by 0.75% yesterday to 3.25% and signalled more hikes ahead in its Rate Statement. This seems to have kept the Canadian Dollar relatively strong.
- Bitcoin/USD made a new 18-month low after its notable technical breakdown below the key support level at $19,616 yesterday, and has now recovered somewhat, but it still looks weak.
- Stock markets have mostly strengthened along with the US Dollar retracement.
- Daily new coronavirus cases globally dropped last week for the seventh consecutive week.
- It is estimated that 67.7% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.7% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.
- Total confirmed new coronavirus cases worldwide stand at over 612 million with an average case fatality rate of 1.06%.
- The rate of new coronavirus infections appears to now be most significantly increasing in the Netherlands, Niger, Taiwan, and Russia.
Forex Today: US Dollar Gives Back Gains
Adam Lemon
Markets are seeing dramatic, strong, long-term risk-off trends powering to new highs in the US Dollar, while risk assets sink.