Tue, September 26, 2023

Forex Today: FOMC Starts Tapering But No Price Hike

Forex Exit strategy

Yesterday, as expected, the FOMC statement announced that there would be no rates hike, but the tapering to QE would start this month. The process would last until the middle of 2022, at a speed of a $15 million monthly reductionThis seems to be a significant policy shift of monetary policy in a less accommodative direction. However, it has a limited market impact, as was widely expected before. The FOMC also used voice, suggesting that the current high inflation rate will be slightly less transitory than their previous assessments. After the statement, the US stocks continued to grow to new all-time high prices. This pace suggests that there will be higher rates in the S&P 500 Indices and NASDAQ 100 over the coming days.

The Forex market remained quiet after the release of the FOMC statement, with the USD being bullish but not moving enough. The EUR, CAD, and AUD are the weakest currency right now, while the USD is the strongest. Although these flows remain short-term, there is a chance for the USD to keep a long-term strength.

Yesterday, the ADP non-farm payrolls estimate came with a prediction that there will be additional 571k new jobs. This prediction seems to be higher than expected compared to the previous consensus of 400k. Today experts wait for the Bank of England’s monthly policy statement release. In their opinion, later, there might be volatility in the British pound.

Recent Covid Cases

Last week, after two months of steady decline in new cases, there was the second global weekly rise in new coronavirus cases. According to the global estimation, around 49.8% of the world’s population has already received at least one coronavirus vaccination dose. 248.8 million is the total confirmed new coronavirus cases in the world. It has an average case fatality rate of 2.03%.

The rate of new coronavirus cases seems to now be increasing quickly in New Zealand, Austria, Chile, Croatia, Bulgaria, the Czech Republic,  Iceland, Denmark, Estonia, Germany, Egypt, Greece, Switzerland, Hungary, Montenegro, Jordan, South Korea, Laos, Lithuania, Netherlands, Norway, Slovakia, Poland, Vietnam, Russia, Singapore, Slovenia, and Ukraine.

Tips for Forex Traders 

The volume of trades is essential as it correlates with pip movement. Therefore, the larger the volume traded, the more the price moves. The UK is considered the most significant single Forex market with around 44% of all trading activity. The US comes after the UK with 18%. The top five are Hong Kong and Singapore with 8% each, followed by Japan 6%.

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