Latest Overview of the Major Forex Currency Pairs
Since the beginning of 2022, the financial markets have been in turmoil, be it the stocks, commodities, or foreign exchange market. While many drivers are triggering this glum scenario, sky-high inflation and periodic interest rate hikes are the leading forces behind this turbulence. Geopolitical tensions and supply chain disruptions are notable factors impacting the financial domain and invoking recession fears among investors.
Regarding the forex market, the Dollar is under an unprecedented “strengthening episode”, in which many other currencies suffer its repercussions. It is mainly due to the globally-accepted “safe and stable” status of the Dollar, that attracts global attention during the market tumult. Further, the higher US Treasury yields due to surging interest rates have also captivated many investors, spurring the Dollar growth even more.
That said, let us explore how the major currency pairs are steering nowadays amid such conflicting conditions:
GBP/USD
After a long downward momentum, GBP has now gathered modest gains against USD after the relatively “dovish” Fed statement recently. Chair of the Federal Reserve Jerome Powell’s stance weighed heavily on the Dollar as GBP/USD quickly rallied to the 1.2185 zone from its previously 1.2029 level.
Despite the FOMC, GBP had begun to show recovery signs amidst the slightly weakening Dollar. Moreover, the equity markets’ rebound also helped the GBP/USD pair to regain ground after a long bearish spell. In its upcoming meeting, GBP drew significant support from the expected “50bps hike rate move” by the Bank of England (BOE).
Previously, GBP was under the crossfire of stormy UK politics and Brexit worries; now, the currency can probably take a breather thanks to the Fed’s non-strict statement and the hawkish BOE.
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GBP/USD illustration
USD/JPY
The USD/JPY pair has been on an upward trajectory for a long time, with slight bearish pullbacks. Specifically, over the last few months, the Fed’s interest rate hikes and strengthening of the Dollar have significantly been suppressing the Japanese Yen, as the USD/JPY touched an all-time high of 139.340 recently.
However, the latest dovish FOMC report has capped the bulls for now as the pair plunges to the 136.50 level. Although the next Fed meeting may again tighten the monetary policy and push the pair higher, currently, the bears are dominantly eyeing the USD/JPY sphere.
EUR/USD
Like other major USD pairs, Powell’s lenient demeanor has also impacted the EUR/USD pair. Amid the slightly weakened DXY that has failed to extract support from the recent interest rate surge, the pair has advanced to 1.0220 from the 1.0095 zone.
Last month (July 2022), EUR/USD plummeted to the 0.9950 belt, the lowest level since 2001, due to the overall sturdy Dollar and recession fears in the Eurozone. The upcoming USD and Eurozone’s GDP data can further clarify the direction of this pair, about whether it can set on a bullish momentum in the near-term or if these gains are just temporary.
However, being a trader, you can take advantage of rising and falling markets by joining brands like XPro Markets. Make sure you choose a credible trading brand that incorporates leading tools and high-tech platforms, allowing market players to realize their potential fully.
By ForexNewsNow Team
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