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Forex Today: US Dollar Falls, Stocks Hit Long-Term Highs

Forex Today: US Dollar Falls, Stocks Hit Long-Term Highs

The US dollar continues to fall, and US stocks rise significantly, on the back of growing market consensus that the Fed has decided to raise rates and will begin cutting rates next year.

➡️ Market sentiment continues to be dominated by the fallout from last week's lower-than-expected US and UK inflation data, which suggests the Federal Reserve is unlikely to make any further rate hikes and, having reached a terminal rate at 5,50%, will cut its rates. interest rate of 0.50% by July 2024. This sentiment is lifting many riskier assets and driving the US dollar lower.

➡️ Some of the major U.S. stock market indexes hit new multi-year high prices yesterday. L' benchmark S&P 500 index traded at a 3-month high, while the NASDAQ index 100 has reached a new 20-month high price. Such strong momentum in the US stock markets will attract day and trend traders to the Long side and historically represents a good statistical chance of profit.

➡️ Japan's Finance Minister tweeted yesterday that positive signs are starting to emerge in the Japanese economy, with wage growth finally consolidating, which could leave the door open for the Bank of Japan to finally abandon its ultra monetary policy -convivial in 2024. helped trigger continued gains by the Japanese Yen, which has been the strongest major currency

➡️ In the Forex market since the Tokyo opening today, while the Canadian Dollar has been the weakest. Almost all major currencies are rising against the US dollar, with the EUR/USD currency pair which reached a new 3-month high and the GBP/USD pair which reached a new 2-month high. However, many trend followers will not be ready to take new long-term trades in these currency pairs as their short-term moving averages remain below their long-term moving averages, which is often a key trading filter in strategies who follow the trend.

➡️ The Reserve Bank of Australia has released minutes from its latest policy meeting which revealed strong concerns about demand-led inflation. This may have helped boost the Aussie for further rate hikes, but the Aussie would still likely have performed well in the current risk-on environment.

➡️ Canadian CPI (inflation) data and US FOMC meeting minutes will be released later today.

 

Credit by DailyForex.com

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