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Extreme volatility was seen in the markets in the past 24 hours. Yen rebounds broadly today after Japan confirmed that “decisive” currency intervention was made. That came after BoJ stood pat and pledged to keep rate at low level. Swiss Franc was sold off sharply after SNB hiked 75bps, but hinted at the possibility of […]
The post Yen Rebounds on Intervention, Swiss Franc Tumbled after SNB appeared first on Action Forex.
Dollar broke out to the upside overnight following hawkish Fed hike. At the same time, it’s closely trailed by Swiss Franc for now, on geopolitical risks. Risk aversion is also keeping Yen afloat in crosses, despite strong rally in treasury yields. For now, Kiwi is the worst performer for the performer among the weak commodity […]
The post Dollar Upside Breakout after Hawkish Fed, SNB and BoE Next appeared first on Action Forex.
The Japanese Yen gained against the US Dollar as USD/JPY saw its most volatile day in over 6 years due to government intervention. What are key levels of support to watch ahead?
We have come through a flood of monetary policy from the Fed, BOE, BOJ and others. While the general trend is towards tightening, there is just as much disparity contributing to instability. The fallout I am most concerned over is an indeterminant recession. Our economic status is the primary fundamental focus Friday.
Asia-Pacific markets face a risk-off day despite a US Dollar pullback driven mainly by Japanese Yen strength following an intervention in FX markets.
USD/CAD may attempt to test the July 2020 high (1.3646) as the Relative Strength Index (RSI) climbs into overbought territory for the first time this year.
U.S. equity indices continued to fall after the FOMC hiked interest rates yesterday and reaffirmed their commitment to bring inflation under control despite economic growth concerns
The EUR/USD is trading with a neutral bias on Thursday, but retains a bearish outlook, especially after the Fed endorses an ultra-hawkish monetary policy tightening roadmap.
The Japanese Yen is surging as the Ministry of Finance intervenes to support the currency.
The US Dollar has had a big week so far and it isn’t over yet as price action is still absorbing the plethora of data that’s come into the picture.
The Bank of England unpredictably raised rates by 50bps to 2.25% after an aggressive Fed yesterday.
Gold remains close to 29-month lows as the prospect of more interest rate rises leaves non-yielding assets vulnerable.
It happened again yesterday: the Fed increased their overnight rate by 75 bps towards 3.25% as expected. However, they hinted that an additional 75 bps rate hike will happen in the November FOMC meeting, followed by another 50 bps rate hike at the December FOMC meeting. Therefore, we might have a range of 4.25% to 4.5% at the end of this year. The hiking cycle expectation was previously lower than this, which is why the stock markets plunged and the US dollar index (DXY) increased to a 20-year and four-month high (since June 2000). At the same time, the EURUSD pair fell to a new 20-year low to 0.9809, the AUDUSD fell to a two-year and four-month low of 0.6574. The USDCAD increased to a two-year and two-month high of 1.3544. The three pairs mentioned above are trading at 0.9844, 0.6640, and 1.3484, respectively, at the time of this writing.
Jay Powell delivered an unambiguous message that the Fed is ready to take interest rates higher to address inflation risks in the near-term, which will weigh on asset valuations and tighten financial conditions. For instance, US mortgage rates have climbed to the highest level since 2008, with the average 30-year fixed-rate home loan reaching 6.25% last week. The Fed will continue to step on the brakes.
Japan intervened to support the Yen after its first fall since 1998 after the Fed ramped up its hiking rate cycle and strengthened the USD. The USDJPY fell (strong Yen) towards an intraday low of 140.36 at the beginning of the North American session from 145.9 at the beginning of the European session, which is an almost 4% move within a few hours. It trades at 142.31 at the time of this writing. Masato Kanda said the Japanese government was taking, “...decisive action early today.” The truth is that this intervention shows that Prime Minister Fumio Kishida’s government has reached the limit of its patience after seeing the Yen fall ~ 21% versus the US dollar in 2022 (YTD).
A range of other central banks have hiked rates by 50-75 bps over the last 24 hours. The Bank of England hiked its rate by 50 bps as expected. After some choppiness, the Cable trades flat at 1.1269, and the UK yields are losing the initial push to the upside. The BoE rate sits at 2.25% at the moment.
The Swiss Franc fell the most since 2015 against the Euro after the Swiss National Bank’s 75 bp interest-rate hikes did not satisfy market participant expectations. The EURCHF trades at 0.9640, up 1.4%, and the USDCHF trades at 0.9789, increasing 1.3%. The Swiss Franc is very weak today because many market participants had bet on a more aggressive SNB, so they are unwinding EUR and USD shorts against CHF.