Focus on the Fed's decision and the EU's energy problems
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AUD/USD 🔼
USD/CAD 🔽
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In Tuesday's financial markets, risk aversion dominated, favoring the dollar most. Several factors affected the mood of the market.
Gazprom, the Russian gas giant, is supplying Germany with approximately 20% of its usual supply of natural gas. For the upcoming winter, the EU countries have agreed to reduce gas consumption by 15% by the end of the six-month period. Despite the fact that Moscow reported that the missing turbine for the pipeline was on its way after maintenance, it has yet to be installed.
Also of interest to speculators were the yields on US bonds. Since 2000, the yield curve has never been more inverted. The yield on 2-year Treasuries is 3.03 percent, while the yield on 10-year notes is 2.76 percent. An inverted curve typically predicts a recession.
The International Monetary Fund (IMF) has reduced its global growth forecast for this year from 3.6 percent to 2.9 percent. The organization also issued a warning that the Ukraine conflict and high inflation could tip the world economy into a deep recession. The World Economic Outlook also said that a complete gas cutoff from Russia to Europe and a decline in the nation's oil exports would further impede development in 2023.
With EUR/USD edging closer to 1.0100, the EUR was once more among the USD's weakest rivals. The GBP/USD exchange rate remained above 1.2000, while the AUD/USD closed at 0.6935. The USD/CAD pair increased as oil prices declined, trading close to 1.2890.
There was no movement in safe-haven currencies, with the USD/CHF staying stable at 0.9620 and the USD/JPY currently trading at 136.75.
Spot gold remained at a familiar level, though it was close to the bottom of its most recent range. The price of an ounce of the shiny metal is $1,717.
The United States' decision to sell an additional 20 million barrels of oil from its Strategic Petroleum Reserve contributed to the slight decline in crude oil prices, which was also a result of the depressing mood. WTI's final trading price for the day was $94.90 a barrel.
The US Federal Reserve is presently the center of attention. Although there is a probability of a 100 bps change, it is widely expected that the central bank would increase the funds rate by 75 basis points. Since the most recent Fed meeting, the latter has become less and less plausible as economic growth keeps declining. To control inflation, policymakers might not want to risk a recession.
More information on Mitrade website.
GBP/USD 🔼
AUD/USD 🔼
USD/CAD 🔽
USD/CHF 🔽
USD/JPY 🔼
XAU 🔽
WTI 🔼
In Tuesday's financial markets, risk aversion dominated, favoring the dollar most. Several factors affected the mood of the market.
Gazprom, the Russian gas giant, is supplying Germany with approximately 20% of its usual supply of natural gas. For the upcoming winter, the EU countries have agreed to reduce gas consumption by 15% by the end of the six-month period. Despite the fact that Moscow reported that the missing turbine for the pipeline was on its way after maintenance, it has yet to be installed.
Also of interest to speculators were the yields on US bonds. Since 2000, the yield curve has never been more inverted. The yield on 2-year Treasuries is 3.03 percent, while the yield on 10-year notes is 2.76 percent. An inverted curve typically predicts a recession.
The International Monetary Fund (IMF) has reduced its global growth forecast for this year from 3.6 percent to 2.9 percent. The organization also issued a warning that the Ukraine conflict and high inflation could tip the world economy into a deep recession. The World Economic Outlook also said that a complete gas cutoff from Russia to Europe and a decline in the nation's oil exports would further impede development in 2023.
With EUR/USD edging closer to 1.0100, the EUR was once more among the USD's weakest rivals. The GBP/USD exchange rate remained above 1.2000, while the AUD/USD closed at 0.6935. The USD/CAD pair increased as oil prices declined, trading close to 1.2890.
There was no movement in safe-haven currencies, with the USD/CHF staying stable at 0.9620 and the USD/JPY currently trading at 136.75.
Spot gold remained at a familiar level, though it was close to the bottom of its most recent range. The price of an ounce of the shiny metal is $1,717.
The United States' decision to sell an additional 20 million barrels of oil from its Strategic Petroleum Reserve contributed to the slight decline in crude oil prices, which was also a result of the depressing mood. WTI's final trading price for the day was $94.90 a barrel.
The US Federal Reserve is presently the center of attention. Although there is a probability of a 100 bps change, it is widely expected that the central bank would increase the funds rate by 75 basis points. Since the most recent Fed meeting, the latter has become less and less plausible as economic growth keeps declining. To control inflation, policymakers might not want to risk a recession.
More information on Mitrade website.