Forex Analysis by Fawad Razaqzada covering: US Dollar Index Futures, US Dollar Index. Read Fawad Razaqzada's latest article on Investing.com
and commodity dollars – some of the assets that have come under intense pressure – all bounced off their lows on Monday, we haven’t seen much follow-through so far in Tuesday’s session.
It appears as though Friday’s soft jobs report was a game-changer for US rates markets. Short-term US yields took a nosedive as the market consensus shifted dramatically, nowthe Fed to slash rates significantly this year. We're talking about a massive shift: the market is now pricing in around 120 basis points of Fed rate cuts before year-end, all driven by recession fears. No more hoping for a smooth, orderly adjustment in Fed policy.
The sharp correction in equities has put high beta currencies under pressure, preventing them from benefiting from significantly lower US rates. It has been a tough environment out there, and it seems like these currencies just can’t catch a break – even though they managed to bounce nicely off their lows yesterday, there wasn’t much in the way of follow-through today.
Japan has been a favorite for carry trade, thanks to the Bank of Japan’s ultra-loose policy that’s been in place for many years, coupled with a weak yen. This has made the yen an attractive option for global investors looking to maximize their returns through carry trades.This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way.
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