Should We Focus on the Strength and Weakness of the U.S. Dollar and European Currencies, Which Are Moving in Opposite Directions?

Should We Focus on the Strength and Weakness of the U.S. Dollar and European Currencies, Which Are in a Standoff?

24.01.2022

Last weekend, the three major U.S. stock indices all continued to fall, resulting in a market environment characterized by falling stock prices, lower interest rates, and rising crude oil prices. The yield on the 10-year U.S. Treasury note stood in the 1.77% range, while WTI crude oil reached its highest level since September 2018.It has risen to $85.8 per barrel. The VIX (fear index) rose to 28.8. The Fear & Greed Index, which measures investor sentiment, has fallen to 43.

The foreign exchange market opened without a gap. Although stock prices are falling globally, the foreign exchange market has remained relatively stable, with the stalemate between European currencies and the U.S. dollar continuing. The euro/dollar pair fell slightly to 1.130 before recovering.During today’s Asian trading session, the pair has continued to trade within a range of 1.127 to 1.137. We will be watching closely to see if the U.S. Federal Open Market Committee (FOMC) meeting scheduled for the 26th of this week will clarify the direction of the market.

Today, at 17:15, the French Manufacturing/Services PMI will be released; at 17:30, the German Manufacturing/Services PMI; at 18:00, the Eurozone Manufacturing/Services PMI; and at 18:30, the UKManufacturing and Services PMIs, the U.S. Chicago Fed National Activity Index at 22:30, the U.S. Manufacturing and Services PMIs at 23:45, and a U.S. 2-year Treasury auction at 27:00.Since the PMIs for each country are preliminary figures, investors should be cautious of sudden price fluctuations following the release of the results.