Sentiment generated by the prospect of the U.S. Federal Reserve finally starting to cut rates is pushing gold and the Japanese yen to new long-term highs.
➡️ Markets are currently dominated by anticipation of the US Federal Reserve meeting on Wednesday, where it is widely expected to begin a process of interest rate cuts for the first time in 4 years. Over the weekend, sentiment shifted in favor of a 0.50% cut, with 59% expecting this versus 41% expecting a 0.25% cut, according to the CME FedWatch tool. This is pushing the U.S. dollar lower and some other currencies and assets higher, especially gold and the Japanese yen.
➡️ Gold It looks bullish and is moving very close to the record high reached today, near $ 2.600. Gold is moving in a clear sky and could continue to move higher. Trend and momentum traders will be interested in being long gold.
➡️ The Japanese yen continues to strengthen as a currency with monetary policy diverging from the dovish moves to cut rates seen almost everywhere. The pair of valuyou USD/JPY It traded at a new 1-year low below the round number of ¥140 just a few hours ago. Trend and momentum traders will be interested in being long the yen.
➡️ In the Forex market, the Japanese Yen was the strongest currency today, while the US Dollar was the weakest, focusing on the USD/JPY pair.
➡️ The 2-year US Treasury yield looks bearish as the US dollar falls, briefly trading at a new 2-year low in the past few hours. Trend traders will be interested in shorting here if they can access this asset (micro futures contracts are available on the CME).
➡️ A few hours ago, there was an assassination attempt against former President Trump on a golf course. It appears that President Trump has never been in direct danger. Betting markets currently give Vice President Harris a slight edge as the favorite, but polls in swing states show Trump just on the verge of a narrow victory in the Electoral College. Most analysts believe Harris performed better in the debate a few days ago, but polls remain tight, even though Harris has a clear lead in the national popular vote.
➡️ The governor of the Bank of Canada said he was open to increasing the pace of rate hikes in an interview with the Financial Times. This could cause some weakness in the Loonie (Canadian dollar) today.
Credit by DailyForex.com