The flow from stocks into US dollars continued yesterday, as FOMC meeting minutes showed that members see tight interest rates remaining for some time.
➡️ As often happens in January during a strong bull market, a major turnaround has occurred since the beginning of 2024, with a sharp sell-off in stock markets and a flow of Forex into the US dollar. These moves continued yesterday after FOMC meeting minutes revealed an aggressive stance as members expressed the belief that interest rates would remain restrictive for a longer period, with major Asian indexes ending the day lower down after sharp declines in US indices. This caused stocks to fall and the US dollar to rise. However, markets still see a 72.6% chance of a first rate cut at the March 2024 meeting.
➡️ The impact of the Japanese earthquake has raised expectations that the Bank of Japan will not be able to start abandoning its ultra-loose monetary policy this month, and perhaps not for a few months to come. This is weakening the Japanese yen, which is the weakest major currency since Tokyo opened today. The New Zealand dollar is the strongest. Long-term bullish trends remain valid for EUR/USD and a bearish trend for USD/JPY , although both saw strong countertrend movements yesterday.
➡️ A prominent asset on the market right now, as 2024 begins, is Bitcoin , which is conducting a bullish consolidation after reaching a new 20-month high price two days ago above the round number of $45,000. This bullish breakout will attract the interest of traders, especially trend traders.
➡️ In commodity markets, cocoa futures stand out as being well entrenched in a long-term uptrend and are not too far off the highs.
➡️ High-impact US data results released yesterday:
- ISM manufacturing PMI : Slightly better than expected.
- JOLTS Job Offers – slightly worse than expected.
➡️ Today there will be some important data releases:
- German Preliminary CPI m/m
- Change in ADP non-agricultural employment
- Unemployment claims in the United States
Credit by DailyForex.com