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Emerging Markets Struggle as the Mighty Dollar FlexesThe recent strength of the US dollar is posing a significant challenge for emerging markets around the world. Their currencies are weakening, creating a ripple effect across their economies. This article explores the reasons behind the dollar's dominance, the impact on emerging markets, and potential policy responses. A Rising Dollar: The Driving Forces The US dollar has been on a tear in recent months, appreciating against most major currencies. This surge can be attributed to several factors, including: • US Federal Reserve Policy: The Federal Reserve's aggressive interest rate hikes aimed at curbing inflation are attracting investors seeking higher returns on dollar-denominated assets. This increased demand strengthens the dollar. • Global Economic Uncertainty: As concerns about a global economic slowdown grow, investors flock to the perceived safety of the US dollar, seen as a safe haven asset during times of turmoil. • Geopolitical Tensions: The ongoing war in Ukraine and heightened tensions between the US and China are further fueling risk aversion, pushing investors towards the dollar. Emerging Markets Under Pressure The rise of the US dollar presents a major headache for emerging markets. Weakening local currencies lead to several problems: • Imported Inflation: When the local currency weakens, the cost of imported goods rises. This can exacerbate inflation in emerging markets, which are already grappling with rising prices due to global supply chain disruptions. • Debt Burden: Many emerging market economies have significant dollar-denominated debt. A weaker local currency increases the cost of servicing this debt, putting a strain on government finances. • Capital Flight: The strengthening dollar can trigger capital outflows from emerging markets as investors seek better returns elsewhere. This can lead to currency depreciation and hinder economic growth. Policy Responses: Verbal Intervention and Beyond Emerging markets are not sitting idly by as their currencies weaken. Several are exploring policy options to counter the dollar's might: • Verbal Intervention: Central banks in some emerging markets, like Malaysia, have resorted to verbal intervention, signaling their commitment to supporting their currencies. However, this approach has limited long-term effectiveness. • Interest Rate Hikes: Some central banks, such as Brazil, are considering raising interest rates to attract capital inflows and stabilize their currencies. However, this risks slowing down economic growth. • Currency Intervention: Central banks may intervene directly in the foreign exchange market by selling dollars and buying local currency to prop it up. This approach can be expensive and depletes foreign exchange reserves. JPMorgan and ANZ Weigh In: The Need for More Tools Financial institutions are also analyzing the situation. JPMorgan Asset Management suggests that more verbal intervention may be necessary from emerging markets to manage volatility. However, analysts at ANZ bank believe that China, a major emerging market with significant influence, may need to deploy a wider range of tools, potentially including capital controls, to limit the depreciation of its currency, the yuan. Looking Ahead: A Delicate Balancing Act The coming months will be critical for emerging markets. Central banks face a delicate balancing act, trying to tame inflation without stifling economic growth. The strength of the US dollar will be a major factor influencing their decisions. The ability of emerging markets to navigate this challenging environment will have a significant impact on the global economic outlook.
TVC:DXYLong
by bryandowningqln
Why both Gold & U.S. Dollar Index are rising ? (IMPORTANT)The Intricate Dance of Gold and the U.S. Dollar The relationship between the U.S. Dollar Index (DXY) and Gold prices is a fascinating study in economics. Typically, these two have a reverse correlation. The reason for this inverse relationship is that gold is priced in U.S. dollars. Therefore, when the dollar strengthens, gold becomes more expensive for investors using other currencies. This can decrease demand for gold and subsequently lower its price. However, this correlation is not set in stone. There are times when both the DXY and gold prices can increase simultaneously. This can occur due to a variety of factors such as geopolitical tensions, market uncertainty, or changes in monetary policy. For instance, from early 2022 to the beginning of 2024, the correlation between gold and the DXY has seen periods of both synchronicity and divergence. This indicates that other factors are influencing gold prices. Currently, despite the rising DXY, gold prices are also on an upward trend. This could be attributed to investors seeking safe-haven assets amidst economic or geopolitical uncertainty. This increases the demand for gold, driving up its price even as the dollar strengthens. Additionally, expectations of changes in monetary policy, such as interest rate cuts, can also affect gold prices. In conclusion, while the DXY and gold prices often move in opposite directions, there are times when they dance to the same tune. This intricate dance is influenced by a myriad of factors, making the relationship between the DXY and gold prices a complex and intriguing aspect of global economics. Prepared by : Arman Shaban
OANDA:XAUUSDEducation
by ArmanShabanTrading
7
DXY is overbought, maybe a little corrections?(4/12/2024)In our last analysis, the DXY TVC:DXY moved as we had anticipated. Right now the bullish scenario is dominant, but DXY is overbought and hit a resistance. So there is a chance that price make some retracement. Our technical view has been shown in the chart. If you like it then Support us by Like, Following, and Sharing. Thanks For Reading Team Fortuna -RC (Disclaimer: Published ideas and other Contents on this page are for educational purposes and do not include a financial recommendation. Trading is Risky, so before any action do your research.)
ICEUS:DXY
by fortunamarkets
Dollar Index (DXY): Multiple Time Frame Analysis & Plan 💵 After a breakout of a key daily structure resistance yesterday, Dollar Index is consolidating within a horizontal range on an hourly time frame. For those, who are looking for an intraday signal to buy, a bullish violation of the resistance of the range - an hourly candle close above 105.32, will give a strong bullish confirmation. A bullish continuation will be expected at least to 105.6 level then. ❤️Please, support my work with like, thank you!❤️
TVC:DXYLong
by VasilyTrader
1
GBPUSD Weekly Outlook: Analyzing Potential Trends and IdeasIn this video, I'll conduct a comprehensive analysis of GBPUSD , examining it from a High Timeframe (HTF) perspective down to our Low Timeframes (LTF) . This approach will provide insights into what to expect in trading for the upcoming week. Additionally, I'll delve into an analysis of the DXY to further enhance our understanding of market dynamics. Stay tuned for valuable insights and strategies. Kind Regards, The_Architect
by The_Archi-tect
🚨DXY Index Is Ready to Go Down by H&S Pattern🚨🏃‍♂️ DXY index is moving near 🔴 Heavy Resistance zone($105.88-$104.65) 🔴. 📈In terms of Classical Technical Analysis , the DXY index has succeeded in forming an Ascending Broadening Wedge Pattern and is currently completing the right shoulder of the Head and Shoulders Pattern . 💡Also, the Regular Divergence (RD-) between the right and left shoulders of the H&S Pattern is clearly visible. 🔔I expect the DXY index to continue its decline after breaking the 🟢 Support zone($104.26-$103.88) 🟢 around $103 . U.S.Dollar Currency Index ( DXYUSD ) Analyze, 4-hour time frame⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy; this is just my Idea, and I will gladly see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
TVC:DXYShort
by pejman_zwin
1
Real yield in uptrendThe weekly real yield is in uptrend, which should act as support for the USDOLLAR and as a headwind for the risk markets. This video is intended for the users of Stratos Markets Limited, Stratos Trading Pty. Limited and Stratos Global LLC, (collectively “FXCM Group”). Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
JSE:GFI
by FXCM
DXY Analysis before NFP(4/5/2024)In our last analysis, we had anticipated a minor correction in DXY but the correction has exceeded our expectations. Right now, because of selling pressure in DXY, the momentum has gone weak. Plus, the market is waiting for NFP/Unemployment news. So we are expecting a correction in DXY to the 103.7 zone before going up. Our technical view has been shown in the chart. If you like it then Support us by Like, Following, and Sharing. Thanks For Reading Team Fortuna -RC (Disclaimer: Published ideas and other Contents on this page are for educational purposes and do not include a financial recommendation. Trading is Risky, so before any action do your research.)
ICEUS:DXYLong
by fortunamarkets
DXY Index Is Ready to Go Up🚀✅The DXY index has succeeded in breaking the 🔴 Resistance zone($104.27-$103.80) 🔴. 📈From the point of view of Classical Technical Analysis , DXY seems to have succeeded in forming an Ascending Broadening Wedge Pattern . Of course, we must wait for the reaction to the upper line of this pattern . 🔔I expect the DXY index to rise to at least 🟡 Potential Reversal Zone(PRZ) 🟡. U.S.Dollar Currency Index ( DXYUSD ) Analyze, 4-hour time frame⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy; this is just my Idea, and I will gladly see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
TVC:DXYLong
by pejman_zwin
3
Retest 1.083 prior to more Downside -> EurUsd 🐺Based off fundamentals and apparent momentum in the market, my bias remains as bearish for the EurUsd currency pair. The Monthly candle has reteaced nearly all of it's gains as we come to a close in 2 days. The the top wick signals rejection from the high of the Monthly resistance to me (1.103). This coincided with Jobs data and Increasing inflation data and the last few weeks we have observed bearish momentum in the market. Yes this week so far we have recieved some buying pressure off the 1.0805 daily support level. Although with GDP data forecasted to remain unchanged tomorrow and Housing data expected to grow for the U.S. economy, I can observe more potnetial USD strength to end the March Monthly candle. First target is 1.0805 retest of the Daily support level, then 1.08 4hr zone and ultimately 1.0768 weekly level
Short
by ShrewdCatfx
4