A look at the Forex Market this past week | June 13-19, 2023
The forex market was volatile in the past week, with the US dollar strengthening against most major currencies. The dollar’s strength was driven by a number of factors, including rising interest rates in the US, concerns about a global recession, and the ongoing war in Ukraine.
US Dollar Strengthens
The US dollar strengthened against most major currencies in the past week. The dollar index, which tracks the value of the dollar against a basket of six major currencies, rose to a 20-year high of 105.29 on June 15.
There are a number of factors that have contributed to the dollar’s strength. One factor is the rising interest rates in the US. The Federal Reserve has raised interest rates by 0.75 percentage points in the past two months, and is expected to continue to raise rates in the coming months. This is making the US a more attractive place to invest, as investors are seeking higher yields.
Another factor that has contributed to the dollar’s strength is concerns about a global recession. The war in Ukraine and the ongoing COVID-19 pandemic have weighed on global economic growth, and there are growing concerns that a recession could be on the horizon. This is making investors more risk-averse, and they are favoring the dollar as a safe haven currency.
Euro Under Pressure
The euro was under pressure in the past week, as the European Central Bank (ECB) has been slow to raise interest rates. The ECB is facing a difficult balancing act, as it needs to raise rates to combat inflation, but it also needs to avoid raising rates too quickly and tipping the eurozone economy into recession.
The euro fell to a 10-year low against the dollar on June 15, as investors grew concerned about the ECB’s ability to control inflation. The euro is likely to remain under pressure in the coming months, as the ECB is expected to lag behind the Fed in raising interest rates.
Other currencies that were under pressure in the past week include the Japanese yen and the British pound. The yen fell to a 20-year low against the dollar, as investors sought higher yields in other currencies. The pound also fell against the dollar, as concerns about the UK’s economic outlook increased.
What to Expect in the Coming Weeks
The forex market is likely to remain volatile in the coming weeks, as investors continue to assess the risks to the global economy. The dollar is likely to remain strong, as the Fed continues to raise interest rates. However, other currencies could start to appreciate if investors become more optimistic about the global economic outlook.
Forex Trading Tips
There are a few things you should keep in mind when trading in the forex market. First, forex is a highly volatile market, so it is important to use risk management techniques. Second, you should have a clear trading strategy and understand the risks involved. Third, you should use a reputable broker and trade on a regulated exchange. Charty’s preferred broker is Vantage Markets.