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FX Market Overview, April 25 – Dollar Skyrocketed, Who’s Behind It and What’s Next?

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Forex Market Overview

The greenback speculators are in control as the US Dollar mounts higher against all of the major currencies. Honestly, with no US fundamental on Wednesday’s economic calendar, there wasn’t any apparent catalyst. However, here’s what could have triggered the bullish rally in the dollar.

Weakness in the foreign economic events, especially the Eurozone, UK, and Japan, along with developments in the US economy makes the dollar more attractive investment than other currencies.

Today durable goods and jobless claims news won’t damage the greenback because orders are anticipated to grow and the labour market is stable.

On the other hand, the US bond yields are sinking, and stock exchange remains unchanged. But we simply can’t ignore the fact that the US stocks are trading near record levels and the tenacious surge in stocks makes the Federal Reserve more and not less likely to tighten. It means, the Federal Reserve won’t hesitate to hike the interest rates, if he has to, over strong growth in the economy.

Highlighted Price Action

  • USD/JPY broke above 112 to rise to its strongest level this year.
  • EUR/USD dropped to its lowest since June 2017. Well, one of the reasons behind bearish euro is the German business confidence which deteriorated in April.
  • The Bundesbank added fuel to the fire by warning that growth could be softer than initially forecast. Between negative yields, ECB dovishness, risk of new tariffs from the US and weaker data, we have been looking for 1.10 EUR/USD for some time. Presently that 1.12 support has been violated, it should only be a matter of time before the pair slides lower to this level.
  • Sterling also got under selling pressure. However, there were no UK economic releases. For your info, the Bank of England meets next week, and despite some data improvements, it will most likely echo its peers’ cautious sentiment.

What’s Next Today?

US consumer goods Orders

Thursday, 12:30. Orders of consumer goods function an excellent gauge of investment and are closely watched by the Fed. The report is for March and is input towards the valuable information on a subsequent day. In Feb, headline orders born by one.6%, However, core orders rose by zero.1%. The headline tends to be volatile. Markets hope for will increase this point.

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