Forex Today: Market Sentiment Improves as Currencies Respond, Fed Makes a Comeback

Must Read

Positive news and coordinated central bank action drove today’s currency markets. Market sentiment was bolstered as Wall Street cheered news of UBS buying Credit Suisse, helping to buoy the Dow Jones Industrial Average by more than 1%.

U.S. yields also ended the day higher after hitting a monthly low earlier. The 10-year yield rebounded toward 3.50%.

US Dollar Index posts lowest close in a month

The CBOE Volatility Index (VIX) dropped by almost 6%, indicating that investors felt less uncertain about the market outlook. Meanwhile, the U.S. Dollar Index fell by 0.54%, posting its lowest close in a month as investor risk appetite increased.

The Forex market responded positively to the improved market sentiment. The movements in F.X. markets were primarily supported by news that UBS had purchased Credit Suisse and a rebound in U.S. yields from their monthly lows.

Analysts are closely watching the U.S. Federal Reserve’s upcoming FOMC meeting, set to begin on Tuesday. The central bank is in a difficult position, as markets are pricing in a 70% probability of a hike in interest rates of 25 basis points at this meeting.

FXStreet said, “French President Emmanuel Macron’s government survived a no-confidence vote. European Central Bank (ECB) President Christine Lagarde spoke at the European Parliament, repeating that inflation is projected to remain “too high” for too long.”

British Pound Surges on Positive News and Sentiment

The British Pound was one of the biggest winners in the currency markets, driven by a combination of positive news and market sentiment. GBP/USD broke its 5-day trading range, rising to 1.2270, the highest since early February.

Looking ahead, investors will now shift their attention to the Bank of England’s monetary policy decision on Thursday. Analysts expect the BOE will maintain its current interest rates unchanged but could change its quantitative easing program if needed. Increasing economic uncertainty due to Brexit could also factor heavily into their decision.

Today’s currency markets responded favorably to an improving outlook for global financial markets due to coordinated central bank actions, UBS’s purchase of Credit Suisse, and Chairman Powell’s reassurance of further economic support from the Federal Reserve.

- Advertisement -spot_img
- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img