Michael_Stark_Exness

Michael_Stark_Exness

As in most other major pairs with the dollar, USDJPY has declined recently as it became clearer that the Fed is very likely to cut rates several times before the end of the year assuming the data continue to come in roughly as expected. For the yen, the situation with monetary policy is less clear: after a surprise hike last month, the Bank of Japan might continue...

Michael_Stark_Exness

The yen’s strengthening accelerated at the very end of last month as the Bank of Japan (BoJ) surprised markets with another hike to 0.25%. However, it’s unclear whether the BoJ will hike again within the next few months since various senior members of its board have ruled this out when markets have been so unstable. Based on current expectations, the difference in...

Michael_Stark_Exness

Euro-dollar was significantly less active since the middle of last week as traders evaluated probabilities for monetary policy over the next few months. The Fed is now around 50-50 on whether it’ll call for a single or double cut on 18 September while analysts generally expect the ECB to cut twice more before the end of the year. Overall, economic conditions are...

Michael_Stark_Exness

The European Central Bank (‘the ECB’) left its main rates on hold on 18 July as widely expected. Although participants seem to be expecting one or two more cuts before the end of the year, the central bank itself doesn’t have a clear intention for September’s meeting. The main reason for the ECB’s reservation is that isn’t not clear yet whether inflation is...

Michael_Stark_Exness

The dollar has declined across the board with few exceptions in recent weeks after lower inflation in the USA and increasing expectations that the Federal Reserve might cut three times before the end of the year. Recent developments in American politics haven’t had a clear effect on forex, but traders will continue to monitor polling as the presidential election...

Michael_Stark_Exness

GBPUSD has had various boosts recently from a range of positive factors apart from lower American inflation. These include positivity around the new British government and better than expected British GDP. Overall expectations seem to be that the Bank of England will cut rates at its meeting on 1 August. 11 July’s intraday high around $1.295 was last seen in July...

Michael_Stark_Exness

The dollar’s losses against the yen come as a result of lower American inflation and increasing expectations that the Bank of Japan (‘the BoJ’) might start to be more aggressive in normalising policy and generally trying to support the yen. The performance of the Japanese economy in recent years based on GDP has been weak and the extended divergence in policy...

Michael_Stark_Exness

The euro has made gains against the yen in June, with the Japanese currency losing out across the board over the last several months as the Bank of Japan (‘the BoJ’) has been more cautious than expected in starting to tighten policy. Fresh verbal interventions by the government of Japan continue but so far haven’t had a significant impact on markets. The current...

Michael_Stark_Exness

Euro-dollar held close to monthly lows in the middle of June as traders continued to expect more cuts from the ECB than the Fed this year and it remained clear that overall economic performance in the eurozone is worse than the USA. However, it’s unlikely that either the EU or the USA will face a recession this year or a significant divergence in policy will open...

Michael_Stark_Exness

Gold is currently trading around where it started the monthly amid similar levels of volatility to May but less clear direction. Traders generally haven’t paid much attention to the war in the middle east or tension around Taiwan in recent weeks, with the focus remaining on American rates and when they’re going to start coming down. On the whole, economic data...

Michael_Stark_Exness

The greenback hasn’t appreciated significantly against the loonie in June so far despite generally gaining elsewhere and fairly mixed economic data from Canada. The main reason for that appears to be oil’s recovery, with American light oil now above $80. Retail sales in Canada have declined in recent months while producer prices have increased, so the Bank of...

Michael_Stark_Exness

The euro is down around 1.6% against the pound in 2024 so far with most of that decline within the last month. June’s PMIs were mostly disappointing, raising the probability of another cut by the European Central Bank (‘the ECB’) later this year. The ECB was among the first major central banks to call for a cut at its meeting earlier this month. The bounce since...

Michael_Stark_Exness

Since the Federal Reserve (‘the Fed’) still seems likely to lag other major central banks in cutting rates, the dollar has mostly strengthened in the last few days. Overall economic conditions in the USA are also significantly better than in the UK; so far, there’s no clear slowdown in either American GDP or the job market. The 200 SMA around $1.262 might be an...

Michael_Stark_Exness

AUDUSD hasn’t shown any obvious direction since gains in the first half of May although the price is somewhat lower than where it started the year as the expected pivot by the Fed has been pushed progressively further and further back. Australian monthly inflation at 3.6% in April is only slightly higher than the figure for the USA, but the Reserve Bank of...

Michael_Stark_Exness

GBPJPY reached a fresh 16-year high on 17 June above ¥201. Among the factors affecting the yen negatively are the ongoing strong divergence in monetary policy with most major, advanced economies, generally weak demand and inflation in Japan and a high ratio of debt to GDP. However, the rhetoric from the Bank of Japan (‘the BoJ’) shifted at its last meeting, with...

Michael_Stark_Exness

The divergence in monetary policy between the USA and Japan is still likely to remain for at least many months and possibly years. This week’s meeting of the Bank of Japan (‘the BoJ’) probably won’t result in any shift in rates, but attention is on whether the BoJ might reduce its purchases of bonds. For now, there’s no discussion of any further intervention to...

Michael_Stark_Exness

Despite generally less inspiring data from the UK recently, the pound has continued its gains against the dollar although with lower momentum. The dominant news for the pound currently is the upcoming general election to be held on 4 July; currently the opposition Labour party is likely to win a landslide according to polling. Traders generally expect the Bank of...

Michael_Stark_Exness

The situation for oil is quite different from gold in most respects, the main one being the overall downtrend. This accelerated earlier this week as OPEC+ announced that some voluntary cuts would end in October while other compulsory ones would continue into next year: the net result is more daily barrels coming to markets from around the middle of...