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Improving Mood Sees Forex Market Ease

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How can Crypto Protect You from Inflation
  • USD Index Moves Lower Ahead of Data
  • Euro and Pound Recovery Continues
  • Stocks Aim For Positive End to Week

The forex market noticed some further weakening of the Dollar today as traders took advantage of an improving market mood to emerge from the safe haven where many have been in recent weeks and months. This means that a still very strong US Dollar Index has nudged down further to hit new monthly lows. This comes as important inflation-related data is due in the US today. At the same time, the mood on Wall Street is improving as markets seek the first positive week in many. 

Dollar Losing Ground Ahead of Inflation Data

The US Dollar has dominated the market for those forex trading in recent times. There was little if any room for strength in other currencies when faced with the force of the greenback. This position started to shift early in the week and has continued through to Friday. The US Dollar Index which measures the strength of the USD against other major currencies, while remaining high, has hit a new low for the month approaching 101.50. 

This move comes ahead of a day when PCE (Personal Consumption Expenditures) figures are set to be released. This data is known to be the preferred gauge of inflation for the Fed so will undoubtedly move markets based on the result. Any move to the downside with these figures could point to easing inflation and further lower the Dollar.

Other Major Currencies Move HIgher

The weakness seen in the Dollar in recent days with forex brokers has presented an opportunity for other major currencies including both the Euro and Pound. Both have taken the chance to move higher with the Euro on the front foot above 1.07 against the Dollar. Comments from the ECB in regard to the timing of rate hikes to come did little to move the common currency. 

In the UK, the announcement of a UK household support package has helped the Pound consolidate its position above 1.26. The package will provide one-off payments to households in need as they battle against a rising cost of living and recent price hikes. 

Stocks Push to Finish Week Higher

The stock market has been on a losing run that now stretches multiple weeks. Traders are hoping this will turn around today as all three major indices look to end the week higher than where they started. Thursday was a big trading session in terms of the market sentiment with all three gaining significant ground to make a week in positive territory all the more likely. 

Of the three, the Nasdaq has added on 3.4% for the week though it sits the most off its record high and well inside bear market territory. The S&P 500 was 4% higher on the week yesterday as it looks to break a seven-week losing streak. The Dow Jones has been the biggest gainer of the week up 4.4%.

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.