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Home » FOREX WEEKLY REVIEW: April 15th – April 19th, 2024

FOREX WEEKLY REVIEW: April 15th – April 19th, 2024

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Dollar Dominates on Geopolitical Jitters and Hot Inflation

The US dollar emerged as the strongest currency this week, buoyed by a combination of factors:

  • Geopolitical tensions in the Middle East: Rising tensions between Iran and Israel sent investors fleeing to the perceived safety of the US dollar.
  • Stronger-than-expected US inflation data: Hot CPI figures bolstered expectations of continued hawkishness from the Federal Reserve, further supporting the dollar.
  • Risk aversion: The aforementioned factors led to a risk-off sentiment in the market, with investors pulling away from riskier assets like stocks and commodities. This further boosted the dollar’s appeal.
  • Major Pair Performances:

  • USD/JPY: The USD/JPY pair climbed towards the key level of 155, with the Bank of Japan (BOJ) maintaining its ultra-dovish stance in contrast to the Fed’s hawkish signals.
  • EUR/USD: The euro remained largely flat against the dollar, with geopolitical jitters offsetting any positive data from the Eurozone.
  • GBP/USD: The British pound took a hit after stronger US inflation data dampened risk appetite.
  • Winners and Losers:

  • Winner: USD (US Dollar): The US dollar strengthened across the board, gaining against most major currencies.
  • Losers: EUR (Euro), GBP (British Pound), JPY (Japanese Yen): These currencies all fell against the US dollar as investors sought safe havens.
  • Other Interesting Stories:

  • Commodity-linked currencies like the Australian and Canadian dollars also came under pressure this week as risk aversion weighed on commodity prices.
  • The Chinese yuan (CNY) remained relatively stable despite the broader risk-off sentiment, as China’s central bank took steps to support the currency.
  • Emerging market currencies generally weakened against the US dollar, as investors turned away from riskier assets.
  • Looking Ahead:

  • The upcoming week will be crucial for the forex market, with key events like the US inflation report and the BOJ meeting potentially impacting currency valuations.
  • Geopolitical developments in the Middle East remain a major wildcard, and investors will be closely monitoring the situation for any signs of escalation.
  • The overall risk sentiment will continue to play a significant role in forex market movements.

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