ACY Securities

The US dollar has maintained its upward momentum as the week commenced, resulting in the dollar index reaching a fresh peak of 106.30 yesterday. This surge has been fuelled by the continual rise in US yields, particularly at the long end of the yield curve.

US Treasury Bond yields soared with the benchmark 10-year rate up to 4.54% from 4.43%, a 16-year high. The two-year US yield rose to 5.12% (5.11%). Minneapolis Fed President Kashkari said one more rate increase was needed after US Consumer prices rose in August.

The Eurozone's PMI figures, released last Friday, slightly exceeded expectations, but they still indicated a significant contraction in economic activity. This has raised concerns about the possibility of negative GDP growth in the second half of the year.

Even if we still expect the dollar to turn lower by early 2024, USD upside risks remain material in the near term after the Fed surprised with more hawkish dot plots than market pricing.

The futures CFDs introduced by ACY Securities will primarily be quarterly contracts across various assets however, the energy futures CFDs will be available as a monthly contract, catering to traders who prefer shorter-term trading opportunities.

Against the Japanese Yen, the US Dollar soared to 148.35 from Friday’s 147.58 after the Bank of Japan maintained its ultra-easy monetary policy. The BOJ kept its policy rate unchanged at -0.10%.

The Swiss National Bank held their main policy rate at 1.75% on Thursday, slightly unexpected, and kept the door open for more action if needed.

Central banks stole the spotlight this week as they reacted to persistent worries about inflation and indications of a slowing economy.

One of the primary reasons for the recent decline in the performance of the British Pound (GBP) can be attributed to a significant reassessment by the financial markets regarding the potential for additional interest rate hikes by the Bank of England (BoE).

The Dollar Index (DXY), which gauges the value of the Greenback against a basket of 6 major currencies, eased to 105.40 from 105.55. US bond yields were mixed. The 10-year rate climbed to 4.49% while the 2-year yield fell 6 basis points to 5.14%.

USD: Fed signals higher rates for longer & softer landing for US economy. During the Asian trading session, the US dollar has maintained its strength following the recent FOMC meeting.

Yesterday, the EUR/USD experienced a brief surge in value, but it appears that market participants are maintaining their positions in the US dollar in a hawkish stance from the Federal Reserve.