Connect with us

Forex

Dollar Forex Market Pullback Provides Some Relief

mm

Published

 on

  • Fed Tapering Concern Eases as USD Dips
  • COVID-19 and Recovery Still Major Concern
  • More Records Toppled on Wall Street

The USD forex market has pulled back slightly as we move toward the end of the week. The Dollar has relinquished some of the strength and pace it had gathered in previous days, though concern still remains, and both the Euro and Pound stay trapped at slightly lower levels than of late. The key concern for traders seems to have moved beyond inflation and tapering to focus more on the COVID-19 Delta variant as cases remain an issue. Meanwhile, though, this has not troubled Wall Street, stocks finishing higher again on Thursday. 

Tapering Concerns in the Rearview Mirror

Through the midweek, the major news and point of concern was the CPI and PPI inflation data and how these hot numbers would impact trading. The answer is that those forex trading seem to have already priced in a large number. Similarly, they were left untouched by a hawkish Fed outlook that is sure to see tapering come into action soon on bond purchases. 

A number of Fed Presidents from around the country have spoken out this week on how Jerome Powell and the body need to take a step back from the current scale of economic support they are providing, with a key starting point being the tapering of bond purchases. So far, Powell has remained tight-lipped on whether this may be the case, and how soon it could happen though, seeming to retain the ultra-supportive stance he has held since the beginning. 

Attention Returns to Virus Cases 

With the hurdle of inflation numbers basically cleared for now, attention from traders and forex brokers alike has returned to the rising number of COVID-19 Delta cases in the US and elsewhere. This is yet to hamper a strong economic recovery, or at least it has not been reflected in the numbers, but it is still the main point ofo concern for many. 

Florida seems to be one of the states that have been most impacted by the latest surge in cases with as many as 1,200 new cases per day being reported in the state. This follows new outbreaks in other parts of the country, and to a lesser extent in China which had been case-free for a very long time. 

Records Continue on Wall Street

On Wall Street, nothing seems capable of stopping the current positive momentum. Even the hotter than anticipated inflation numbers that appeared yesterday couldn’t dampen the mood. The S&P 500 closed at another new record high and is pushing to finish the week once again in positive territory.

The sentiment has been brought on for the most part by a very strong earnings season with major companies reporting good numbers, and the like of Disney continuing to crush the expectations of analysts. All eyes will be on any Fed action to see how this may factor into the equities market in the week ahead.

 

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.

Advertiser Disclosure: Securities.io is committed to rigorous editorial standards to provide our readers with accurate reviews and ratings. We may receive compensation when you click on links to products we reviewed.

ESMA: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Investment advice disclaimer: The information contained on this website is provided for educational purposes, and does not constitute investment advice.

Trading Risk Disclaimer: There is a very high degree of risk involved in trading securities. Trading in any type of financial product including forex, CFDs, stocks, and cryptocurrencies.

This risk is higher with Cryptocurrencies due to markets being decentralized and non-regulated. You should be aware that you may lose a significant portion of your portfolio.

Securities.io is not a registered broker, analyst, or investment advisor.