We had another good Jobs data from the US on Friday, above 200k, when stocks turned up and dollar weakened further. But real mover was caused by the ISM index, it came below 50, that’s means a contraction, so economic health can be worsening. It means the FED should really be careful with hiking rates. Powell said they will be slowing down the hikes this year, which makes sense as inflation is coming down in recent months, but we have a new CPI data coming out this week from the US. IMO FED will stop hiking cycle when inflation % YOY is closer to interest rates %. So if we get another month of lower inflation, investors will believe that rates are closer to a peak so yields can drop further with the USD. At the same time, EUR, GBP, and commodity currencies can see more gains.
I really like USDNOK for a potential breakdown. I covered this one and more in our webinar. Recording is below.
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Webinar recording Monday 09 2023
EURCAD is unfolding a bullish impulse. Check our chart HERE