Forex is an over-the-counter (OTC) marketplace where the currencies of the world are traded. In contrast to other prominent financial centers, forex facilitates trade without a centralized exchange, implementing an exclusively digital platform. Limited barriers of entry, ease of transaction and high market liquidity are its calling cards. Easily the world's largest market, the average daily traded volume in forex dominates all other global marketplaces. For April 2016, daily volume measured more than US$5 trillion in value, according to BIS. Of that amount, trade of major global currencies such as the United States dollar (USD), euro (EUR), Japanese yen (JPY)…
The pair dropped to new 2023 lows, after the Reserve Bank of Australia kept rates at 4.1% for fourth straight meeting on Tuesday, in the first decision under its new governor
The spread between the US 10-year bond and the Japanese 10-year bond continues to widen. This is the primary driver of the USDJPY currency pair. The correlation coefficient between the two is a remarkably robust 90%.
The US 10-year real yield remains elevated at the start of the week. This is putting pressure on the risk market and supporting the dollar as the current preferred haven. The question is how much higher can yields run?
The USDCAD has charted a higher trough. This is a show of strength and lays the platform for a potential higher peak for the currency pair.
The US real benchmark yield is normalising from an overbought condition. This is rippling through the market, with FXCM’s USDOLLAR also pulling back from an overbought condition. The corollary to this is that the EURUSD is also reacting.
A key driver of the financial markets is the higher real benchmark yield.
Inflation accelerated in August according to today’s data, but the pair remains downbeat, as USD strength persists in the aftermath of the Fed’s hawkish hold
The US 10-year real rate has supported FXCM’s USDOLLAR basket. As the real rate has moved up, so has the USDOLLAR. The correlation coefficient between the two is a robust 84%. This is not surprising. The higher real yield is likely to exert pressure on the risk side of the market, with the dollar benefitting as a safe-haven.
The pair extends its losses below critical tech levels this week, in the aftermath of the Fed’s hawkish hold and the dovish hike by its European counterpart in this month’s round of policy decisions
The pair sets fresh eleven-month highs today, after last week’s policy decisions by the two central banks, maintained the favorable monetary policy differential
The pair took a one-two punch this week, as both central banks paused their rate hiking cycles, but the Fed offered a clearer and more hawkish outlook compared to its UK counterpart
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