Market participants are likely to keep a close eye on the U.S. dollar following the FOMC meeting, as it weakened on hints of a rate cut in September

Market participants are likely to keep a close eye on the U.S. dollar following the FOMC meeting, as it weakened on hints of a rate cut in September

01.08.2024

In yesterday’s U.S. currency markets, although the Federal Open Market Committee (FOMC) kept the policy rate unchanged at 5.25–5.50%, the U.S. dollar became the weakest currency immediately after the meeting following remarks by Fed Chair Powell regarding a potential rate cut at the next meeting in September. The USD/JPY pair fell from 153.907 to 149.628, breaking below the 20-period moving average (MA) on the hourly chart.On the 4-hour chart, the price has reached the -3σ level of the Bollinger Bands, and on the daily chart, it has broken below the 200-day SMA.

Despite the preliminary July Harmonized Index of Consumer Prices (HICP) for the eurozone, released yesterday, showing a year-over-year increase of 2.6%—up from 2.5% the previous month—the euro weakened alongside the U.S. dollar. The euro/yen exchange rate fell from 166.545 to 162.055. During today’s Asian trading session, it has dropped further to 160.882. We will be watching closely to see if the euro continues to weaken against the yen.

Today’s economic indicators include Japan’s foreign and domestic securities investment and South Korea’s trade balance at 8:50 a.m., Indonesia’s manufacturing PMI at 9:30 a.m., and Australia’strade balance, 4:00 PM Turkey Manufacturing PMI, 4:50 PM France Manufacturing PMI, 4:55 PM Germany Manufacturing PMI, 5:00 PM Eurozone Manufacturing PMI, 5:30 PM Hong Kong Retail Sales, 5:30 PM UK Manufacturing PMI, 6:00 PM EurozoneEmployment Report, UK BOE interest rate decision and statement at 8:00 PM, UK BOE Governor Bailey’s press conference at 8:30 PM, US Nonfarm Productivity Index at 9:30 PM, US PMI at 10:45 PM, US Construction Spending at 11:00 PM, and the US ISM Manufacturing Index.We will be closely monitoring the US dollar following the FOMC meeting, which weakened on hints of a September rate cut.