- Fed Hawkish Message Continues
- Pound Positive Ahead of PM Resignation
- Stock Futures Move Positively
The Euro forex market has continued to struggle in recent days as it now occupies one of its lowest levels in a considerable amount of time against a strong US Dollar. The grim economic outlook has weighed on the currency and at the same time strengthening the USD. In the UK, there was positive movement for the Pound as British leader Boris Johnson announced his resignation. Meanwhile, on Wall Street, early trading looked positive as the market continues trying to move higher in the face of economic challenges.
Strong Fed Message Supports US Dollar
The US Federal Reserve has remained resolute in the face of an impending recession and all of the noise around the market that signals a downturn. This has given strength to the already powerful safe-haven status of the Dollar, and so it continues this week. The FOMC meeting minutes were a mixed bag in terms of further strengthening the Dollar.
There was no mention of a recession from policymakers in the documents. This will have been a positive for those forex trading other currencies as it managed to lift the mood slightly. There was also no further indication that the Fed is planning a massive 100 basis point interest rate rise. There was room left though for a potential 75bps rise in the rate to come.
Pound Improves as PM Departs
The Pound has been largely struggling alongside other currencies in the face of surging Dollar strength. While the currency has not lifted to any great heights, it is seeing an increase in demand today following the announcement that Prime Minister Boris Johnson is to step down as leader of the UK conservative party and with that, give up his position as leader of the country. The Pound was trading at above 1.19 against the Dollar at the time of the announcement.
Johnson’s departure had been widely expected as most of his own party had continued turning against his leadership in recent weeks and days. The leader clung on to power before announcing today that he would step down following months of pressure to do so. He will for now continue as interim leader of the country until a new leader is elected.
Stocks Try to Continue Building Momentum
Despite the poor turn in the market mood, stocks and early trading in the US continued positively. This continues recent days of upward movement as forex brokers and stock traders alike try to capitalize on any good signs. The Dow Jones added on more than 300 points through the day.
The other major markets are also moved into positive territory with the S&P 500 and Nasdaq both gaining on the day and week. The Dow is well on track for its second positive week in three as it keeps trying to climb back toward recent highs of which it is about 20% short.