All eyes are on whether the U.S. dollar, now the world’s strongest currency, will continue to rise

All eyes are on whether the U.S. dollar, now the world’s strongest currency, will continue to rise

10.01.2024

In the previous day’s U.S. currency trading, the U.S. dollar became the weakest currency during U.S. trading hours, despite remarks by Fed Vice Chair Bar that “the key issue is not whether to raise rates further this year, but how long to maintain restrictive interest rates.” The EUR/USD pair fell from 1.0966 to 1.091, trading below the 20-period moving average on the 4-hour chart. We will be watching closely to see if the U.S. dollar continues to weaken heading into U.S. trading hours.

European currencies saw the euro trade sideways against the yen after French Central Bank Governor Villeroy de Galhau stated, “If the 2% inflation target becomes firmly established, rate cuts are possible. The timing of ECB rate cuts will depend on the data.”The euro/yen pair traded in a narrow range between 157.191 and 157.983, and during today’s Asian session, the yen has weakened to 158.414. Other yen crosses are also rising, and given the euro’s particularly sharp gains, investors should remain cautious ahead of economic data releases during European trading hours.

Today’s economic indicators include German industrial production, Turkish employment figures, Turkish industrial production, and the Norwegian consumer price index at 4:00 PM; Hungarian industrial production at 4:30 PM; the French current account balance and trade balance at 4:45 PM; the U.S. MBA mortgage applications index at 9:00 PM; U.S. wholesale inventories at midnight;at 12:30 AM: U.S. weekly crude oil inventories; at 3:00 AM: U.S. 10-year Treasury auction; and at 5:15 AM: remarks by U.S. Federal Reserve Bank of New York President Williams. We will be watching closely to see if the U.S. dollar, now the strongest currency, will continue to rise.