Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
The Euro, symbolised by ‘€’, stands as a significant entity in the global economic stage. Initially conceived to enhance economic unity within Europe, its impact now stretches far beyond the confines of the European Union (EU).
Euro, source: Pymnts
The Euro stands as the world’s second most vital currency. Its presence and influence are substantial, consistently comprising an average share of nearly 20% across various indicators of international currency usage.
In this article, we will delve into the historical evolution of the Euro, its far-reaching implications on international trade, its revered status as a reserve currency, and its pivotal role in promoting economic stability and integration.
Moreover, we’ll explore its sway over financial markets and its intricate role in shaping geopolitical dynamics. Looking ahead, we will adopt a forward-thinking perspective, considering potential trajectories that could define the Euro’s role on the global stage.
Understanding these possible developments is vital, as it equips us to anticipate and adapt to the evolving dynamics of the global economy.
A Brief Historical Journey
The Euro’s inception and journey through time have been pivotal in shaping the economic landscape of Europe and beyond. Let’s delve into the key stages that mark this historical evolution.
The Euro’s story begins with the signing of the Maastricht Treaty in 1992, which laid the groundwork for the Economic and Monetary Union (EMU). The treaty aimed to foster economic integration among European nations, a crucial step towards establishing a unified currency and a more tightly-knit economic community.
Signing the of the Maastricht Treaty in 1992, source Studio Europa Maastricht:
The vision set by the Maastricht Treaty came to life on January 1, 1999, when the Euro was introduced as an electronic currency for banking and financial transactions. This virtual beginning was a steppingstone towards creating a seamless financial landscape within the Eurozone.
Taking a leap forward, the Euro transitioned from the digital realm to the physical world on January 1, 2002, with the introduction of Euro banknotes and coins. This marked a significant milestone, underlining the successful integration of numerous European economies under a singular currency.
Euro banknote, source Business Insider
This historical journey showcases the deliberate and strategic steps taken to unify Europe economically and integrate its nations into a cohesive entity. The evolution from a treaty to a tangible currency demonstrates the vision and determination of the European nations to embrace a united economic destiny.
The Euro’s Impact on Global Trade
The Euro’s impact on international trade is significant and diverse. Presently, the Eurozone represents approximately 15% of global trade, a figure comparable to the United States, albeit slightly lower compared to when the Euro was first introduced. This decline in the Euro’s share is attributed to China’s rise rather than a decrease in extra-Euro area trade, which has remained robust.
The role of Euro in in the international monetary system 2022, source European Central Bank
As the official currency of the Eurozone, encompassing 19 EU countries, the Euro removes the necessity for frequent currency conversions. This simplification streamlines cross-border trade, reducing transaction costs and facilitating financial transactions within the Eurozone.
The Euro’s stability, wide acceptance, and low volatility make it a popular choice for trade beyond the Eurozone, simplifying trade with non-Eurozone entities. Utilising the Euro for international trade reduces risks associated with fluctuating exchange rates, ensuring stable transactional value and a secure cross-border trade environment.
The Euro as a Crucial Reserve Currency
The Euro’s status as a reserve currency underlines its stability and significance in the global financial landscape. In 2022, its share in global foreign exchange reserves increased to 20.5%, emphasising its importance.
Shares of the Euro, US dollar and other currencies in global official holdings of foreign exchange reserves 2022, source European Central Bank
Being on par with major currencies like the US dollar, Japanese yen, and British pound sterling, the Euro maintains a prominent position as a reserve currency.
Global central banks and institutions hold significant reserves in Euros, providing liquidity and stability during economic fluctuations or financial crises, thus bolstering the global financial ecosystem. Furthermore, the Euro’s role as a reserve currency influences exchange rates and monetary policies worldwide, impacting trade and financial market dynamics.
The Euro’s Role in Economic Stability and Integration
The Euro’s impact on economic stability and integration in the Eurozone is fundamental. Under the guidance of the European Central Bank (ECB), the Eurozone maintains a unified monetary policy. This coordination ensures a consistent approach to managing inflation, interest rates, and money supply, promoting economic stability and predictability.
European interest rate by ECB, source Statista
The Eurozone strengthens stability by encouraging fiscal discipline among member nations. The Stability and Growth Pact establishes fiscal guidelines, promoting responsible budgeting, debt control, and prudent financial management. This disciplined approach bolsters confidence in the Euro and supports long-term economic stability.
By establishing a single currency, the Eurozone mitigates exchange rate risks and uncertainties associated with multiple national currencies. This stability is attractive to investors and businesses, encouraging investments and fostering economic growth across the Eurozone.
Euro’s Impact on Global Financial Markets
The Euro significantly influences global financial markets. Its exchange rate fluctuations against major currencies – US dollar, Japanese yen, and British pound sterling – impact trade, investment, and capital flows.
Frankfurt Stock, source: Reuters
The European Central Bank (ECB) is central to Eurozone monetary policy, making decisions on interest rates, quantitative easing, and other monetary tools that directly affect the Euro’s value and, consequently, financial markets.
Economic indicators from Eurozone countries, covering GDP growth, unemployment rates, inflation, and manufacturing data, offer crucial insights into the region’s economic health, shaping market sentiment and impacting traders’ perceptions of the Euro’s strength.
The Euro’s movements have a ripple effect across various asset classes, impacting commodities, equities, and bonds. This correlation is vital for investors aiming to manage portfolios and diversify their investments effectively.
Euro and Geopolitical Dynamics
The Euro’s role extends beyond the economic realm, exerting a significant influence on geopolitical dynamics.
One historical example of this influence can be seen in the aftermath of the 2008 global financial crisis. The prominence and strength of the Euro bolstered the European Union’s stature on the global stage during a time of economic upheaval. This example illustrates how the Euro impacts geopolitical landscapes.
The Euro provides the Eurozone with significant global economic leverage. Its status as a major reserve currency enhances the region’s economic influence and ability to participate in international economic decision-making.
EU Parliament, source Reuters
The Euro’s significance influences diplomatic relations between the Eurozone and other nations. It shapes negotiation dynamics, trade dialogues, and strategic alignments, as the Euro’s strength impacts the bargaining power and perceived stability of the Eurozone in international interactions.
The Euro’s prominence influences the foreign policy strategies of Eurozone countries. Economic considerations linked to the Euro often guide foreign policy decisions, aligning them with broader economic goals and priorities.
The Future of the Euro’s Global Role
The Euro, currently the world’s second-largest reserve currency following the US dollar, is at a turning point. Let’s break down potential scenarios that could shape its development and influence economics, geopolitics, and institutional frameworks.
Scenario 1: Business As Usual
Imagine the Eurozone countries continue with their current approach. Each country independently manages its money, lacking a unified strategy. This could lead to fluctuations in how money moves in and out of the Eurozone.
Scenario 2: Fiscal Union
Another possibility is that Eurozone countries decide to collaborate more closely on financial matters. They establish rules to stabilise their individual economies first. However, this could pose challenges and necessitate substantial changes. While it could strengthen the Euro, it’s not guaranteed.
Scenario 3: Minimum Model
In this scenario, countries commit to maintaining stability domestically and not constantly assisting each other during financial hardships. They agree on adaptable plans to assist during challenging periods. This might result in a strong and stable Euro, albeit potentially less influential on a global scale.
Scenario 4: Enhancing Attractiveness
The concept here is to make the Euro more appealing to a global audience. This could be achieved by introducing more secure and appealing Euro-based investments. However, this could be complex, especially if certain major countries face financial difficulties, prompting significant alterations.
Why Does It Matter?
You might wonder about the significance of these scenarios. Understanding the future is vital because the Euro is a major player in the global financial landscape. Its influence impacts us all, albeit indirectly.
The aim of experts and policymakers is to position the Euro as a strong and dependable currency on the global financial stage. However, determining the best path forward remains a work in progress. Striking the right balance is crucial to ensure the Euro is potent, stable, and beneficial for everyone involved.
Ultimately, the Euro’s future role will depend on how effectively Eurozone countries collaborate and manage their finances. It’s akin to a vast jigsaw puzzle, and everyone is diligently striving to find the perfect fit. The decisions made in the coming years will shape the Euro’s trajectory, impacting economies and individuals across the globe.
As we approach the last week of September, two crucial economic indicators for the US will be released: the final Gross Domestic Product (GDP) and the Consumer Price Index (CPI).
These can strongly affect currency values, so we recommend traders to be cautious and stay informed about the latest news to make wise trading decisions this week.
Germany’s Ifo Business Climate Index (25 September 2023)
The Ifo Business Climate indicator for Germany declined for the fourth consecutive month to 85.7 in August 2023, the lowest level since October 2022.
Analysts expect a reading of 85.2 for the upcoming data, which will be released on 25 September.
Australia Consumer Price Index (27 September 2023)
Australia’s CPI increased by 4.9% in July 2023, slowing from a 5.4% gain in June.
The next CPI data will be released on 27 September, with analysts predicting a 5.2% increase.
Germany’s Prelim Consumer Price Index (28 September 2023)
Consumer prices in Germany rose by 0.3% month-over-month in August 2023, maintaining the same pace as in the previous two months.
The CPI data for September will be published on 28 September, with analysts predicting a 0.4% increase.
US Final Gross Domestic Product (28 September 2023)
The US economy grew at an annualised rate of 2.1% in Q2 2023 compared to the first quarter’s expansion of 2%.
The US final GDP for Q3 2023 will be published on 28 September, with analysts predicting a 2.3% growth rate.
US Core PCE Price Index (29 September 2023)
Core Personal Consumption Expenditures (PCE) prices in the US, which exclude food and energy, increased by 0.2% in July 2023, maintaining the same pace seen in June.
Analysts expect another 0.2% increase in the figures for August 2023, set to be released on 29 September.
Canada Gross Domestic Product (29 September 2023)
Canada’s GDP contracted by 0.2% in June 2023.
The next GDP data will be released on 29 September, with analysts anticipating a slower growth of -0.1%.
Dubai, UAE, 22 September 2023 — VT Markets, a leading brokerage firm in the Middle East and North Africa (MENA) region, is excited to announce its participation in the upcoming Forex Expo Dubai 2023. Scheduled to take place on 26 and 27 September at the World Trade Center in Dubai, this event will unite industry experts, traders, and brokers from around the world to showcase their latest innovations designed to empower traders of all levels.
VT Markets has firmly established its presence in the MENA region by offering exceptional services and cutting-edge platforms tailored to meet the diverse needs of traders. The company’s commitment to excellence has been recognised with numerous accolades, including the Best Forex Platform in UAE 2023 and Best Multi-Asset Broker in the MENA Region 2023.
A representative from VT Markets expressed their enthusiasm about the expo, stating, “We are excited to showcase our innovative trading solutions at Forex Expo Dubai 2023. Our team of experts will be available at booth 38 to provide insights into our latest advancements and unique promotions available exclusively during the event.”
In addition to its commitment to excellence in the finance world, VT Markets has also made significant strides in Corporate Social Responsibility (CSR). The company has partnered with Cotlands, a South African non-profit organisation with an impressive 87-year history of service to young, vulnerable children. Cotlands has made it their mission to increase access to crucial early childhood development opportunities in marginalised communities. VT Markets’ CSR objectives align perfectly with Cotlands’ vision, which is to see children thrive during their formative years by providing them with increased access to early learning.
VT Markets invites all attendees to visit booth 38 at Forex Expo Dubai 2023 to experience its cutting-edge offerings and learn more about its commitment to Corporate Social Responsibility.
About Cotlands:
Cotlands is a registered non-profit organisation that focuses on early childhood development with a rich heritage of 87 years of experience in serving young, vulnerable children. Cotlands’ vision is to see children thrive in their formative years by increasing their access to play-based early learning opportunities. Cotlands provides scalable and cost-effective toy libraries and early learning playgroups targeted at children from birth to six years.
VT Markets is a regulated multi-asset broker with a presence in over 160 countries. The broker has won many international accolades including Best Customer Service and Fastest Growing Broker. Its mission is to make trading an easy, accessible, and seamless experience for everyone.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
On Thursday, stock markets witnessed a notable decline driven by mounting concerns over surging Treasury yields and the looming threat of a government shutdown. Major indexes, including the Dow Jones, S&P 500, and Nasdaq, posted significant losses for the third consecutive day, with the S&P 500 recording its worst session since March. This anxiety was exacerbated by the U.S. 10-year Treasury yield reaching its highest level since 2007 and news of the House going into recess, heightening worries of a government shutdown. The Federal Reserve’s recent announcement of maintaining interest rates but signaling potential future hikes further added to investor unease, particularly regarding prolonged higher interest rates. Tech stocks, such as Tesla and Nvidia, faced substantial declines, while FedEx stood out with strong gains. In the currency markets, the yen emerged as a safe-haven asset, gaining against major currencies amid central banks’ commitment to elevated interest rates, impacting stock markets and risk sentiment.
Stock Market Updates
Stocks experienced a significant decline on Thursday as concerns mounted over rising Treasury yields and the potential for a government shutdown. The Dow Jones Industrial Average dropped by 370.46 points, equivalent to a 1.08% decrease, closing at 34,070.42, while the S&P 500 saw a substantial slide of 1.64% to reach 4,330. The Nasdaq Composite also retreated by 1.82% to end the day at 13,223.98. These losses marked the third consecutive day of declines for these three key indexes, with the S&P 500 recording its worst session since March. Investors were increasingly anxious about the possibility of the Dow and S&P 500 closing the week down by more than 1% and 2%, respectively, while the Nasdaq faced a potential drop of over 3%. Adding to the market’s unease, the U.S. 10-year Treasury yield reached a multiyear high of 4.494%, its highest level since 2007. This surge was fueled by robust labor market data, as weekly jobless claims dropped to 201,000, significantly lower than the expected 225,000 claims, indicating continued strength in the job market. The 2-year yield also soared to 5.202%, levels not seen since 2006, further raising concerns among investors.
Market jitters were exacerbated by news that House Republican leaders had sent the chamber into recess, heightening fears that lawmakers would fail to pass a bill to prevent a government shutdown. Investors worried that such an event could negatively impact fourth-quarter GDP. These developments followed the Federal Reserve’s announcement the previous day, in which it decided to maintain interest rates at their current levels but signaled the possibility of another rate hike before the year’s end. The central bank also hinted at fewer rate cuts in the coming year, reflecting its need to keep rates elevated due to persistent inflation concerns. The clash between market expectations and the actual economic landscape raised concerns among investors, particularly with the prospect of a prolonged period of higher interest rates. Tech stocks, in particular, bore the brunt of these concerns, with companies like Tesla, Alphabet, and Nvidia experiencing declines of over 2%. However, FedEx stood out with a 4.5% gain after reporting better-than-expected earnings for its fiscal first quarter.
On Thursday, the overall market experienced a decline of -1.64%. Among the various sectors, the Health Care sector performed relatively better with a decrease of -0.92%, while the Real Estate sector saw the largest drop at -3.48%. Other notable sector declines included Consumer Discretionary (-2.88%), Materials (-2.04%), and Information Technology (-1.52%). The Financials sector also faced a notable decrease of -1.62%. In summary, it was a day of general market decline, with Real Estate and Consumer Discretionary sectors being the hardest hit.
Currency Market Updates
In the currency markets, the US dollar index saw a slight retreat after approaching its 2023 peak, primarily due to post-Federal Reserve reactions. EUR/USD remained stable, but USD/JPY and yen crosses experienced declines as risk-off sentiment prevailed. Meanwhile, the British pound weakened after the Bank of England’s somewhat surprising decision to refrain from raising interest rates for the first time since December 2021. EUR/USD dipped to 1.0617, its lowest level since March, before rebounding just above the 38.2% Fibonacci retracement level of the 2022-23 uptrend at 1.0608. This reversal was partly attributed to Treasury yields failing to sustain their recent highs following an unexpected drop in US jobless claims. Additionally, remarks from ECB policymakers about the potential need to raise rates in the upcoming meeting contributed to the market dynamics.
The standout performer of the day was the safe-haven Japanese yen, which gained 0.6% against the US dollar, 0.5% against the euro, and nearly 1% against the British pound and the Australian dollar. The overarching theme in the currency markets was the central banks’ consistent messaging about keeping interest rates at elevated levels for an extended period, leading to a retreat in stock markets and risk appetite. This shift in sentiment prompted investors to turn to the low-yielding yen for carry trades. USD/JPY initially surged to a new 2023 high at 148.465, driven by widening yield spreads between US Treasuries and Japanese government bonds, but later dipped to its lowest level in five days due to risk-off flows. Ongoing efforts by the Japanese Ministry of Finance to support the yen against excessive volatility, coupled with risk management ahead of the Bank of Japan’s meeting and Japan’s CPI report, contributed to the consolidation of the uptrend. Meanwhile, USD/CNH rose slightly as concerns about global growth, prompted by major central banks’ commitment to higher interest rates, led to a decline in Chinese stocks and weighed on copper prices. Looking ahead, the market will closely watch data events such as Japan’s August inflation report, UK retail sales, and global flash PMI readings for September on Friday.
Picks of the Day Analysis
EUR/USD (4 Hours)
EUR/USD Falls as FOMC Meeting Spurs Stronger US Dollar, Fed Signals Hawkish Stance
The EUR/USD experienced a significant decline, dropping from its weekly highs above 1.0730 to 1.0650 in response to the FOMC meeting’s outcome. The Federal Reserve unanimously maintained its interest rate target range at 5.25-5.50%, with minimal changes in the statement compared to the previous month. The Summary of Economic Projections suggests the likelihood of another rate hike by year-end, although Fed Chair Powell emphasized that the dot plot is not a firm plan. The market perceived the meeting as hawkish, causing US bond yields to surge to multi-year highs and Wall Street to turn bearish, subsequently strengthening the US Dollar. Upcoming US data releases and decisions from central banks like the Swiss National Bank and the Bank of England will remain pivotal for market dynamics.
According to technical analysis, the EUR/USD moved in high volatility on Thursday and was able to reach the middle band but then moved back lower and reached the lower band of the Bollinger Bands. This movement suggests the possibility of further consolidation. The Relative Strength Index (RSI) is currently at 37, indicating that the EUR/USD is in a neutral stance with a slight bearish bias.
Gold prices fell for the third consecutive day, trading around $1,925 during Asia’s early trading hours on Thursday. The US Federal Reserve (The Fed) kept its benchmark interest rate at 5.5%, but projected more rate hikes in 2023, leading to pressure on precious metals. The Fed’s revision of 2024 interest rate projections, from 4.6% to 5.1%, unexpectedly boosted the US Dollar, causing the US Dollar Index (DXY) to reach a six-month high at 105.60. US bond yields also rose, with the 10-year bond hitting 4.43%, its highest since 2007. Precious metals slipped after Fed Chair Jerome Powell’s press conference, where he reiterated The Fed’s commitment to a 2% inflation target and emphasized data-driven future decisions. More US data, including Weekly Jobless Claims, the Philadelphia Fed Manufacturing Survey, and Existing Home Sales Changes, will impact markets on Thursday.
According to technical analysis, XAU/USD moved in high volatility on Thursday and was able to reach the lower band and then move back higher. Currently, the price is trading between the middle and lower bands. The Relative Strength Index (RSI) is currently at 51, indicating that the XAU/USD pair is back in a neutral stance.
As part of our commitment to provide the most reliable service to our clients, there will be server maintenance this weekend.
Maintenance Hours :
23rd of September 2023 (Saturday) 02:00 – 07:00 (GMT+3)
Please note that the following aspects might be affected during the maintenance:
1. The price quote and trading management will be temporarily disabled during the maintenance. You will not be able to open new positions, close open positions, or make any adjustments to the trades.
2. There might be a gap between the original price and the price after maintenance. The gaps between Pending Orders, Stop Loss and Take Profit will be filled at the market price once the maintenance is completed.
3. Please refer to MT4/MT5 for the latest update on the completion and market opening time. Our services will be back online once the maintenance is completed.
Thank you for your patience and understanding about this important initiative.
If you’d like more information, please don’t hesitate to contact [email protected]
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
On Wednesday, the stock market witnessed a downturn triggered by the Federal Reserve’s decision to maintain interest rates while signaling a looming rate hike. The S&P 500 and Nasdaq Composite both declined, with tech giants such as Microsoft, Nvidia, and Alphabet experiencing significant drops. The Federal Reserve’s cautious approach to rate hikes due to inflation concerns sent shockwaves through the markets, particularly impacting tech stocks that had been performing well earlier in the year. The increase in Treasury yields also raised concerns about the tech sector’s vulnerability to higher rates. Meanwhile, the US dollar had mixed movements in the currency market as the Fed’s hawkish stance influenced market sentiment but concerns about limited rate hike potential limited further gains.
Stock Market Updates
On Wednesday, the stock market experienced a decline in response to the Federal Reserve’s announcement of leaving interest rates unchanged but hinting at an impending rate hike. The S&P 500 dropped by 0.94% to 4,402.20, while the Nasdaq Composite slid by 1.53% to 13,469.13. This decline was primarily driven by significant drops in tech giants like Microsoft, which saw a drop of over 2%, and Nvidia and Google-parent Alphabet, which both experienced declines of around 3%. The Dow Jones Industrial Average also lost 76.85 points, or 0.22%, closing at 34,440.88, with all three major indexes ending the day at session lows.
The Federal Reserve’s decision to keep interest rates steady, while expected, raised concerns among investors as the central bank indicated that one more rate hike is likely before the end of the year. The Fed’s economic projections suggested that after this increase, they would begin cutting rates next year, although rates would remain higher than previously signaled in June. Fed Chair Powell emphasized the need to proceed cautiously in raising rates further due to ongoing concerns about inflation. This news sent shockwaves through the markets, particularly impacting tech stocks, which had been performing well earlier in the year based on the expectation of a less aggressive monetary policy. Additionally, the increase in Treasury yields, with the 2-year yield reaching levels not seen since July 2006 and the 10-year yield hitting a high not seen since November 2007, raised concerns about the potential adverse effects of higher rates on the tech sector.
On Wednesday, across all sectors, the market experienced a decrease of 0.94%. Some sectors showed modest gains, with Consumer Staples up by 0.15%, Real Estate by 0.13%, Utilities by 0.10%, and Health Care by 0.02%. However, several sectors saw declines, including Industrials (-0.39%), Financials (-0.66%), Energy (-0.95%), Materials (-1.03%), Consumer Discretionary (-1.09%), Information Technology (-1.77%), and Communication Services (-1.89%).
Currency Market Updates
In the latest currency market update, the US dollar experienced a day of mixed movements. Initially facing losses, the dollar index managed to stabilize as the Federal Reserve’s hawkish stance boosted market confidence. However, its ability to advance further was limited due to market consensus that there is limited room for the US central bank to raise rate expectations. The Fed’s dot plots indicated a preference for one more rate hike in the current year, reducing the median projection for rate cuts in 2024 from 100 basis points to 50 basis points. Federal Reserve Chair Jerome Powell emphasized the data-dependent nature of their decisions, noting that policy is already restrictive, and the full impact of previous tightening measures has yet to be felt. This announcement led to a sharp decline in the EUR/USD pair as 2-year Treasury yields rebounded to new highs for 2023.
Despite these developments, the dollar index is still grappling with overbought pressures that have arisen from its 6% increase since July. GBP/USD also saw fluctuations, initially dropping following below-forecast CPI data but rebounding ahead of the Federal Reserve’s announcement. To reverse the downtrend, GBP/USD would need to close above the 200-day moving average at 1.2434. Meanwhile, USD/JPY held relatively steady after the Fed events and briefly exceeded the 148 hurdle earlier in the day. The focus now turns to upcoming U.S. data releases and the Bank of Japan’s policy decisions, with potential tension between U.S. and Japanese officials regarding the timing of Japanese FX intervention. Overall, high-beta currencies like the Australian dollar retreated from their pre-Fed risk-on gains, stemming from expectations that major central banks’ tightening cycles are reaching their peaks.
Picks of the Day Analysis
EUR/USD (4 Hours)
EUR/USD Falls as FOMC Meeting Spurs Stronger US Dollar, Fed Signals Hawkish Stance
The EUR/USD experienced a significant decline, dropping from its weekly highs above 1.0730 to 1.0650 in response to the FOMC meeting’s outcome. The Federal Reserve unanimously maintained its interest rate target range at 5.25-5.50%, with minimal changes in the statement compared to the previous month. The Summary of Economic Projections suggests the likelihood of another rate hike by year-end, although Fed Chair Powell emphasized that the dot plot is not a firm plan. The market perceived the meeting as hawkish, causing US bond yields to surge to multi-year highs and Wall Street to turn bearish, subsequently strengthening the US Dollar. Upcoming US data releases and decisions from central banks like the Swiss National Bank and the Bank of England will remain pivotal for market dynamics.
According to technical analysis, the EUR/USD moved in high volatility on Wednesday and able to reach the upper band but then moves back lower and reach the lower band of the Bollinger Bands. This movement suggests the possibility of further consolidation. The Relative Strength Index (RSI) is currently at 39, indicating that the EUR/USD is in a neutral stance with a slight bearish bias.
Gold prices fell for the third consecutive day, trading around $1,925 during Asia’s early trading hours on Thursday. The US Federal Reserve (The Fed) kept its benchmark interest rate at 5.5%, but projected more rate hikes in 2023, leading to pressure on precious metals. The Fed’s revision of 2024 interest rate projections, from 4.6% to 5.1%, unexpectedly boosted the US Dollar, causing the US Dollar Index (DXY) to reach a six-month high at 105.60. US bond yields also rose, with the 10-year bond hitting 4.43%, its highest since 2007. Precious metals slipped after Fed Chair Jerome Powell’s press conference, where he reiterated The Fed’s commitment to a 2% inflation target and emphasized data-driven future decisions. More US data, including Weekly Jobless Claims, the Philadelphia Fed Manufacturing Survey, and Existing Home Sales Changes, will impact markets on Thursday.
According to technical analysis, XAU/USD moved in high volatility on Wednesday and able to reach the upper band then moving back lower. Currently, the price is trading between the middle and lower bands. The Relative Strength Index (RSI) is currently at 48, indicating that the XAU/USD pair is back in neutral stance.
Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.
Please refer to the table below for more details:
The above data is for reference only, please refer to the MT4/MT5 software for specific data.
If you’d like more information, please don’t hesitate to contact [email protected].
Insights 
VT 
