Forexmart's Forex News

Discussion in 'Forex - Currencies Forums' started by Andrea ForexMart, Jan 18, 2018.

  1. KostiaForexMart

    KostiaForexMart Senior Investor

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    The Fed expects further interest rate cuts in 2025

    Christopher Waller, a member of the Fed's Board of Governors, expressed confidence that inflation in the United States will continue to decline in 2025, which will create conditions for further interest rate cuts.

    Although inflation remained above the Fed's 2% target at the end of 2024, market estimates and short-term indicators point to a slowing trend.

    At an OECD event in Paris, Waller stressed that further rate cuts would be possible with a steady decline in inflation and stability in the labor market. He noted that the Fed has already cut the key rate by 1 percentage point over the last three meetings, but at the next meeting in January, the rate is expected to remain in the range of 4.25-4.5%. According to him, opinions within the Fed are divided: from assumptions about the absence of a rate cut to expectations of a reduction of 1.25 percentage points in 2025.

    Waller added that the U.S. economy remains strong, with rising hiring and wages supporting consumer spending. New data on the labor market, which will be published in the coming days, may confirm this stability.
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  2. KostiaForexMart

    KostiaForexMart Senior Investor

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    The pound continues to fall

    The British pound continues to lose ground, showing a noticeable lag behind the trajectory of UK government bond yields. Deutsche Bank analysts recommend selling the pound based on data from a broad trade-weighted index.

    The current quote of the GBP/USD pair is 1.2213. Today, the currency has plummeted from 1.2318. Analysts note that since the beginning of the year, the pound sterling has shown the worst results among world currencies, comparable to the decline recorded after the announcement of the UK budget in November last year.

    In its analysis, Deutsche Bank points to no signs of improvement in the country's current account deficit, as well as the risk of further deterioration in volatility-adjusted yields.

    The bank's report pays special attention to the dependence of the pound on capital inflows through the carry trade, which is now under threat. After taking profits on long positions in December, Deutsche Bank analysts revised their strategy and switched to selling recommendations.

    Since the beginning of the year, the pound has lost just over 1% in the trade-weighted index. Although this has not historically been a significant decline, the recent weakness of the pound is particularly noticeable against the backdrop of the strengthening US dollar, against which most world currencies have reached multi-month or even multi-year lows.
     
  3. KostiaForexMart

    KostiaForexMart Senior Investor

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    A strong US economy strengthens the dollar to a two-year high

    On Monday, the US dollar strengthened, forcing other currencies to reach multi-year lows. Its growth was supported by strong employment data, confirming the resilience of the US economy and complicating the prospects for a Fed rate cut.

    The dollar index, reflecting its exchange rate against a basket of currencies, reached 110.17, the highest in more than two years. This happened against the background of Friday's statistics, which showed an acceleration in job creation in December and a decrease in unemployment to 4.1%. These data have dampened expectations for a rate cut, and markets are now ruling out the possibility of even one cut in 2025.

    The publication of US inflation data on Wednesday could further strengthen the dollar if the CPI rises. Statements from the Fed's representatives are also expected this week, which may clarify their further actions.

    The US economy is demonstrating resilience, which supports a high dollar exchange rate. According to analysts, the labor market has coped with any signs of weakness. Plans for import tariffs, tax cuts, and tougher immigration may also have an impact on inflation.

    The euro fell to $1.0177, reaching its lowest level since November 2022, while the pound sterling fell 0.7%, dropping to a 14-month low of $1.21.
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  4. KostiaForexMart

    KostiaForexMart Senior Investor

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    Japanese bond yields reached record levels

    The yield on Japan's 40-year government bonds has reached a record high since they entered the market. This happened against the backdrop of a global sell-off of debt assets and expectations of higher interest rates from the Bank of Japan in the coming months.

    The indicator increased by 3 basis points, reaching 2.755%, the highest level in the last 16 years. At the same time, Japan's 20-year bond yields have also reached a peak not seen since May 2011.

    Rising yields are recorded around the world, which is associated with increasing concerns about inflation, increasing budget deficits and stable data on the US economy. Such factors force market participants to reconsider their expectations regarding the Fed's interest rate cuts. In addition, investors are gradually putting into their forecasts the probability of a rate hike by the Bank of Japan, estimating this scenario at 60% in the coming week and at 83% by March.

    The Deputy Governor of the Bank of Japan, Ryozo Himino, noted that the possibility of changing the current interest rate policy will be discussed at the upcoming meeting of the central bank. Experts believe that a rate hike may take place in the coming days if market conditions turn out to be favorable for such a decision.
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  5. KostiaForexMart

    KostiaForexMart Senior Investor

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    Oil tanker freight prices skyrocketed amid US sanctions

    The cost of oil transportation is showing a noticeable increase, which is associated with forecasts of a decrease in the availability of tankers on the global market. The reason for this is the expansion of US sanctions measures against the Russian navy. The introduction of these restrictions affected freight rates, which increased between 15-35%, depending on the shipping route.

    It is separately noted that yesterday the Shell oil Corporation leased three large tankers, each of which is capable of transporting up to 2 million barrels of oil. The rental rate was Worldscale 70. The Chinese company Shenghong Petrochemical has also concluded deals for the charter of two vessels at a similar price. Deliveries are expected to be completed in early February.

    According to ship brokers, the increased demand for oil tankers has caused a significant increase in tariffs on the Middle East–China route. In just a day, the indicator increased by WS10.75, reaching WS70.45 by January 15.

    In addition, a similar trend has been recorded in other areas. For example, the fare on the Middle East-Singapore route increased by WS10.45, reaching WS71.80, and on the West Africa-China route, the increase was WS9.23, raising the rate to WS70.67.
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  6. KostiaForexMart

    KostiaForexMart Senior Investor

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    China's GDP growth in 2024 reached the target 5%

    China's GDP grew by 5.4% in the fourth quarter of 2024, exceeding the projected 5% and figures from previous quarters (5.3%, 4.7% and 4.6%). This made it possible to achieve annual economic growth of 5%, which corresponds to the official target.

    Increased economic activity was due to a policy change in September last year, but large-scale incentives are needed for further recovery. At the same time, the statistical bureau warned of weak domestic demand and the impact of external factors, calling for an active macroeconomic policy.

    Positive data strengthened the CSI 300 index by 0.15%, the yuan exchange rate to 7.3398 per dollar, and the yield on 10-year bonds decreased by 2 basis points to 1.638. December growth in retail sales was 3.7%, industrial production – 6.2%, but investments in fixed assets increased by only 3.2% over the year. Investments in real estate decreased by 10.6%. The unemployment rate rose to 5.1%.

    Incomes of urban residents increased by 4.4%, in rural areas – by 6.3%. The representative of the statistical bureau noted weak consumer activity and a possible increase in external pressure in 2025. Inflation in the country remains low, and wholesale prices continue to decline for the 27th month in a row.
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  7. KostiaForexMart

    KostiaForexMart Senior Investor

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    Trump's Inauguration and the Crypto Market: the beginning of an era of change

    Bitcoin exceeded $109,000 for the first time in history, reaching $109,112 during trading. The growth is explained by the expectations of the inauguration of Donald Trump, who supports cryptocurrencies and plans to make bitcoin a national priority.

    Moreover, on the eve of his inauguration, Trump launched the TRUMP meme token on the Solana blockchain, which caused an unprecedented stir. The capitalization of the token has reached $5 billion, and leading exchanges are adding it through futures. The project is linked to CIC Digital, which previously produced Trump's NFT. 80% of TRUMP tokens are blocked for three years, which highlights the long-term plans. The launch of TRUMP coincided with the expectation of the crypto reforms that Trump is going to initiate.

    Against the background of the launch of TRUMP, Solana has significantly increased in price. According to Coin Metrics, the value of SOL increased by 12%, reaching $247.76, although previously the growth was almost 23%. TRUMP, with a capitalization of more than $5 billion, became the largest meme coin on the Solana network, which provoked an increase in interest in the platform. Against this background, large companies are applying to create ETFs related to Solana. Decisions on the applications are expected before January 25. Analysts predict that the approved ETFs will attract significant investments.

    Also, Donald Trump's wife, Melania, announced the launch of her own cryptocurrency, called $MELANIA. The price of the token has reached over $5, and its market capitalization has exceeded $5 billion. In her message, Melania strongly recommended subscribers to think about investing in her project, which immediately received approval from participants in the cryptocurrency market.
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  8. KostiaForexMart

    KostiaForexMart Senior Investor

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    Bitcoin is losing ground amid expectations of Trump's actions

    The collapse of bitcoin from record heights recorded on Monday is related to traders' expectations regarding President Donald Trump's actions in the field of cryptocurrencies. After signing key decrees on the first day of his presidency, the market was hoping for signals about his position on crypto policy.

    Previously, digital assets showed steady growth against the backdrop of Trump's inauguration. The optimism of market participants was caused by hopes for possible initiatives that could support the crypto industry. However, the president focused on other campaign promises, including issues related to TikTok, trade, and energy, without mentioning cryptocurrencies.

    Against the background of this uncertainty, bitcoin lost ground, falling from a historical high of over $109,000. The uncertainty of Trump's trade policy increased the risk in the market, which was reflected in a decrease in the value of the main cryptocurrency to $102,240.

    Additionally, the market was destabilized by Trump's release of the $TRUMP and $MELANIA memecoins, which led to increased volatility. Solana, Cardano and Polygon fell by 3.8-7%, while Dogecoin lost 6.1% among meme tokens.
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  9. KostiaForexMart

    KostiaForexMart Senior Investor

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    Central banks of Sweden and Norway prepare to lower rates

    Experts from Nordea Bank Abp predict the completion of the current cycle of monetary policy easing by the central banks of Sweden and Norway over the next six months. This development is attributed to the expected revival of domestic demand in the Scandinavian countries.

    Riksbank in Sweden and Norges Bank in Norway are projected to reach their target rates by mid-summer, setting them at 2% and 4%, respectively. These indicators suggest a decrease of 50 basis points relative to current values, which is reflected in the latest economic forecast of the key financial institution of Northern Europe, published on Wednesday.

    The forecasts for Sweden proposed by Nordea completely coincide with the consensus opinion of economists. Previously, the bank assumed that the level of the Riksbank key rate would reach 2% by the end of the year.

    At the same time, Nordea's assessment of Norway differs markedly from the median forecasts. According to the latest data, Norges Bank's key interest rate is expected to gradually decrease to 2.9% over the next year.

    For comparison, in the September forecast, Nordea experts assumed three consecutive rate cuts of 0.25 points, which could lead to a decrease in the level to 3.75% by the end of next year.
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  10. KostiaForexMart

    KostiaForexMart Senior Investor

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    Saudi Arabia invests $600 billion in the U.S. economy

    Saudi Arabia has expressed its willingness to increase investment and trade with the United States to the tune of $600 billion over the next four years. At the same time, the possibility of additional investments exceeding the declared volume is allowed.

    This was announced by Crown Prince of Saudi Arabia Mohammed bin Salman Al Saud during a telephone conversation with US President Donald Trump, which took place on January 22.

    During the conversation, prospects for cooperation between Saudi Arabia and the United States aimed at strengthening peace, security and stability in the Middle East region were discussed. In addition, special attention was paid to strengthening cooperation between the two countries in the framework of joint efforts to combat international terrorism.

    The increased investment is expected to have a significant impact on the economic development of both countries, as well as be an important step in strengthening their strategic partnership.
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