FacebookXInstagramTelegram
WhatsApp! 020-122-280-6824

About Editorial team of BIPNs

Main team of content of bipns.com. Any type of content should be approved by us.
24 04, 2026

WTI Crude Oil: Elliott Wave Analysis and Forecast for 24.04.26–01.05.26

By |2026-04-24T15:42:03+03:00April 24, 2026|Forex News, News|0 Comments


The article covers the following subjects:

Major Takeaways

  • Main scenario: Consider long positions from corrections above 79.20 with a target of 115.70–126.00. A buy signal: the price holds above 79.20. Stop Loss: below 77.50, Take Profit: 115.70–126.00.
  • Alternative scenario: Breakout and consolidation below 79.20 will allow the asset to continue declining to the levels of 65.00–53.25. A sell signal: the level of 79.20 is broken to the downside. Stop Loss: above 80.80, Take Profit: 65.00–53.25.

Main Scenario

Consider long positions from corrections above 79.20 with a target of 115.70–126.00.

Alternative Scenario

Breakout and consolidation below 79.20 will allow the asset to continue declining to the levels of 65.00–53.25.

Analysis

A descending correction appears to have formed as the second wave of larger degree (2) on the weekly chart, with wave C of (2) completed as its part. On the daily timeframe, the ascending third wave (3) has started unfolding, with the first wave of smaller degree 1 of (3) still developing as its part. On the H4 chart, wave iii of 1 has likely formed, a local correction iv of 1 has been completed, and wave v of 1 has started unfolding. If the presumption is correct, WTI will continue to rise to the levels of 115.70–126.00. The level of 79.20 is critical in this scenario as a breakout below it will enable the asset to continue declining to the levels of 65.00–53.25.

This forecast is based on the Elliott Wave Theory. When developing trading strategies, it is essential to consider fundamental factors, as the market situation can change at any time.

Price chart of USCRUDE in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.


According to copyright law, this article is considered intellectual property, which includes a prohibition on copying and distributing it without consent.

Rate this article:

{{value}} ( {{count}} {{title}} )





Source link

Read More
24 04, 2026

EUR/USD: Elliott Wave Analysis and Forecast for 24.04.26–01.05.26

By |2026-04-24T15:33:12+03:00April 24, 2026|Forex News, News|0 Comments

The article covers the following subjects:

Major Takeaways

  • Main scenario: Consider long positions from corrections above 1.1445 with a target of 1.2088–1.2400. A buy signal: the price holds above 1.1445. Stop Loss: below 1.1405, Take Profit: 1.2088–1.2400.
  • Alternative scenario: Breakout and consolidation below 1.1445 will allow the pair to continue declining to the levels of 1.1185–1.1000. A sell signal: the 1.1445 level is broken to the downside. Stop Loss: above 1.1485, Take Profit: 1.1185–1.1000.

Main Scenario

Consider long positions above the level of 1.1445 with a target of 1.2088–1.2400 once the correction ends.

Alternative Scenario

Breakout and consolidation below 1.1445 will allow the pair to continue declining to the levels of 1.1185–1.1000.

Analysis

On the weekly timeframe, an ascending wave of larger degree B is developing, with wave (A) of B forming as its part. On the daily timeframe, the third wave 3 of (A) is apparently unfolding. Within it, wave i of 3 has formed, corrective wave ii of 3 has been completed, and wave iii of 3 has started developing. The first wave of smaller degree (i) of iii is forming on the H4 chart. As its parts, wave iii of (i) has been completed, and a local correction iv of (i) is nearing completion. If the presumption is correct, EUR/USD will continue to rise to the levels of 1.2088–1.2400 after the correction ends. The level of 1.1445 is critical in this scenario. A breakout below it will allow the pair to continue falling to the levels of 1.1185–1.1000.

This forecast is based on the Elliott Wave Theory. When developing trading strategies, it is essential to consider fundamental factors, as the market situation can change at any time.

Price chart of EURUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.


According to copyright law, this article is considered intellectual property, which includes a prohibition on copying and distributing it without consent.

Rate this article:

{{value}} ( {{count}} {{title}} )



Source link

Read More
24 04, 2026

Gold Forecast: XAU/USD eyes weekly loss as bears tighten grip

By |2026-04-24T11:41:15+03:00April 24, 2026|Forex News, News|0 Comments


Gold is testing the $4,700 level early Friday, holding at its weakest level in over a week and eyeing the first weekly drop in five weeks.

Gold: Fresh downside opening up before the Fed?

Gold witnesses a down week as bears tighten their grip, following rejection at higher levels on several occasions.

The primary reason behind Gold’s renewed downside is the solid recovery in the US Dollar (USD), as the Greenback looks to snap two consecutive weeks of decline.

Robust Retail Sales and preliminary business PMI data from the United States (US) pushed back against expectations of at least one interest rate cut by the Federal Reserve (Fed) this year, boosting the USD at the expense of the bright metal.

The Greenback also capitalized on resurgent haven demand as Oil prices regained traction amid the US-Iran stalemate on peace talks and the Strait of Hormuz, rekindling fears over pervasive inflation.

In the latest news, US military officials are developing new plans to target Iran’s capabilities in the Strait of Hormuz in the event the current ceasefire with Iran fails, per CNN News.

Meanwhile, Israeli Ambassador to the United Nations (UN) Danny Danon told CNN that the Lebanon ceasefire extension is “not 100%,” warning that Hezbollah is firing rockets to sabotage the truce.

This came after US President Donald Trump announced via Truth Social late Thursday that the Israel-Lebanon ceasefire was extended by three weeks, following the talks in Washington.

Going forward, Gold could continue to face heat from sustained USD demand and uncertainty around the Middle East conflict.

Nonetheless, a brief rebound cannot be ruled out, as investors might resort to repositioning their recent trades heading into next week’s Fed monetary policy meeting.

Gold price technical analysis: Daily chart

In the daily chart, XAU/USD trades at $4,676.24, keeping a bearish near-term tone as spot holds under the short- and medium-term simple moving averages. The 21-day simple moving average (SMA) at roughly $4,701 and the 100-day SMA near $4,741 sit overhead as immediate dynamic resistance, reinforced by the broader descending trend-line that continues to cap rebounds. Momentum is lacklustre, with the Relative Strength Index (14) hovering around 44, which suggests downside pressure is present but not yet stretched.

On the topside, initial resistance is seen at the 21-day SMA around $4,701, followed by the 100-day SMA near $4,741, where the upper boundary of a falling wedge aligns.
Meanwhile, a more meaningful barrier emerges at the 50-day SMA close to $4,870 if bulls manage a stronger recovery. On the downside, the first layer of support comes from the higher rising trend-line around $4,589, ahead of the lower ascending support zone near $4,383; a sustained break below these trend supports would expose the more distant 200-day SMA, now providing structural backing around $4,250.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

Fed Interest Rate Decision

The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).



Read more.

Next release:
Wed Apr 29, 2026 18:00

Frequency:
Irregular

Consensus:
3.75%

Previous:
3.75%

Source:

Federal Reserve

Fed FAQs

Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money.
When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.
The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.



Source link

Read More
24 04, 2026

GBP/JPY Price Forecast: Pound rejected at 216.00, risks deepen below 215.00

By |2026-04-24T11:31:59+03:00April 24, 2026|Forex News, News|0 Comments

GBP/JPY advance stalled around 215.70 on Thursday, retreating to 215.00 as risk appetite deteriorated amid Middle East headlines, leaving traders uncertain about the conflict’s outcome. The cross trades at 215.06 at the time of writing.

GBP/JPY Price Forecast: Technical Outlook

The GBP/JPY pair is consolidating for the second straight day, suggesting that further gains are off the table, with the psychological 216.00 level not yet tested. Worth noting that every upside move towards the latter was rejected, with the 214.00 figure capping downward moves.

Momentum is bullish, as depicted by the Relative Strength Index (RSI), though moving gradually towards its 50 neutral level.

If GBP/JPY closes daily below 215.00, the potential to test the April 17 swing low of 214.00 increases. On further weakness, the next support would be the 20-day Simple Moving Average (SMA) at 213.35, followed by the 50-day SMA at 211.98.

On the other hand, if GBP/JPY registers a new yearly high above 215.91, the chance of clearing 216.00 increases.

GBP/JPY Price Chart – Daily

GBP/JPY daily chart

Japanese Yen Price This week

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the Swiss Franc.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.50% 0.17% 0.59% 0.09% -0.05% 0.15% 0.64%
EUR -0.50% -0.32% 0.07% -0.39% -0.52% -0.39% 0.14%
GBP -0.17% 0.32% 0.41% -0.06% -0.19% -0.06% 0.47%
JPY -0.59% -0.07% -0.41% -0.51% -0.58% -0.45% 0.07%
CAD -0.09% 0.39% 0.06% 0.51% -0.03% 0.05% 0.53%
AUD 0.05% 0.52% 0.19% 0.58% 0.03% 0.20% 0.70%
NZD -0.15% 0.39% 0.06% 0.45% -0.05% -0.20% 0.50%
CHF -0.64% -0.14% -0.47% -0.07% -0.53% -0.70% -0.50%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Source link

Read More
24 04, 2026

Silver Price Forecast: XAG/USD could retest recent lows at $61

By |2026-04-24T07:40:03+03:00April 24, 2026|Forex News, News|0 Comments


XAG/USD Current price: $75.61

  • Financial markets turned risk-averse amid decreased hopes for a US-Iran deal.
  • Israel reported that Iran’s top negotiator resigned from the negotiating team.
  • XAG/USD gains downward traction, faces critical support at $74.61.

Silver came under selling pressure in the second half of Thursday, as risk aversion fueled US Dollar (USD) demand. Financial markets have struggled for direction since the week started, in the hope that the United States (US) and Iran would find common ground to reach a deal that would end the Middle East war.

Enthusiasm, however, faded as days went by, as representatives from both sides missed the date in Islamabad on Wednesday. US President Donald Trump announced the US would maintain the ceasefire, although Tehran won’t. Both countries continue to block the Strait of Hormuz, with skirmishes taking place in the area.

The sentiment finally took a turn for the worse on Thursday, on news coming from Israel indicating that Iran’s Parliament Speaker Ghalibaf has resigned from the negotiating team, erasing any chance of a deal in the foreseeable future. The headline still needs confirmation, but its impact through financial boards is clear.

Whether the situation will escalate remains to be seen. What’s certain is that Crude Oil prices jumped with the headlines, reflecting the market’s idea of no deal at sight and more pain ahead.

XAG/USD short-term technical outlook

The case for additional XAG/USD is firmer after the pair retreated from the 61.8% Fibonacci retracement of the daily slump measured between $96.62 and $61.01 at $83.02. Even further, the pair is currently pressuring the 38.2% retracement at $74.61, and a clear break below the level should open the door for a continued slide toward the base of the range at $61.

In the four-hour chart, XAG/USD trades with a bearish tone as price holds below the 20-, 100-, and 200-period Simple Moving Averages (SMAs), which all act as layered resistance and reinforce a bearish near-term bias. The Relative Strength Index (RSI) indicator turned lower around 37 but lacks directional strength, still skewing the risk to the downside. At the same time, the Momentum indicator holds directionless below its midline, suggesting that sellers retain control, though conditions are not yet oversold enough to suggest imminent exhaustion.

(The technical analysis of this story was written with the help of an AI tool.)

(This story was corrected on April 24 at 00:30 GMT in fifth paragraph to say XAG/USD instead of XAU/USD.)



Source link

Read More
24 04, 2026

EUR/JPY Price Forecast: Holds above 186.50 to test nine-day EMA barrier

By |2026-04-24T07:31:06+03:00April 24, 2026|Forex News, News|0 Comments

EUR/JPY inches higher after three days of gains, trading around 186.60 during Asian hours on Friday. The technical analysis of the daily chart indicates the currency cross is positioned slightly below the ascending channel, signaling potential for a bearish reversal.

However, the EUR/JPY cross holds a constructive bullish bias as it remains above the 50-day Exponential Moving Average (EMA) while facing immediate friction at the nine-day EMA.

Additionally, the 14-day Relative Strength Index sits around 58, comfortably above the midline yet below overbought territory, which suggests positive but not overstretched momentum that could favor further upside as long as the EUR/JPY cross holds over the underlying average.

The EUR/JPY cross is testing the immediate barrier at the nine-day EMA of 186.69. A rebound back to the ascending channel would reinforce the bullish bias and support the EUR/JPY cross to test the all-time high of 187.95, which was recorded on April 17. Further advances above this level would support the currency cross to explore the region around the upper boundary of the channel, around 189.40.

On the downside, further declines would put downward pressure on the EUR/JPY cross to navigate the region around the 50-day EMA at 184.86.

EUR/JPY: Daily Chart

(The technical analysis of this story was written with the help of an AI tool.)

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.09% 0.10% 0.05% 0.10% 0.17% 0.21% 0.12%
EUR -0.09% 0.00% 0.00% 0.00% 0.08% 0.12% 0.04%
GBP -0.10% -0.01% -2.13% 0.02% 0.08% 0.12% 0.02%
JPY -0.05% 0.00% 2.13% 0.03% 0.10% 0.14% 0.03%
CAD -0.10% 0.00% -0.02% -0.03% 0.06% 0.10% 0.02%
AUD -0.17% -0.08% -0.08% -0.10% -0.06% 0.04% -0.07%
NZD -0.21% -0.12% -0.12% -0.14% -0.10% -0.04% -0.09%
CHF -0.12% -0.04% -0.02% -0.03% -0.02% 0.07% 0.09%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

Source link

Read More
24 04, 2026

Forecast update for silver -23-04-2026

By |2026-04-24T03:39:47+03:00April 24, 2026|Forex News, News|0 Comments


Coffee price lost positive momentum in the last trading, which forces it to form new bearish waves, to retest 276.00 support to settle above it, note that the stability above the current support might help it to motivate the bullish corrective attempts, to expect the price rally to 297.00, to extend the trading towards the next obstacle near 312.00.

 

While facing new bearish pressure and reaching the current support will force it to suffer extra losses by targeting 266.10 and 257.00 level.

 

The expected trading range for today is between 280.00 and 297.00

 

Trend forecast: Bullish





Source link

Read More
24 04, 2026

GBP/USD Forecast Live: Retail Sales to Test Pound Sterling Strength

By |2026-04-24T03:30:27+03:00April 24, 2026|Forex News, News|0 Comments


– Written by

STORY LINK GBP/USD Forecast Live: Retail Sales to Test Pound Sterling Strength

The Pound to US Dollar (GBP/USD) exchange rate traded without a clear direction on Thursday, as a combination of upbeat UK PMI data and a cautious market mood pulled the pair in opposite directions.

At the time of writing, GBP/USD hovered around $1.3505, having faced narrow volatility throughout the session.

The Pound (GBP) had a muted start to the trading session, drifting lower as markets considered the possible economic consequences of the Middle East crisis, including concerns that the UK government might introduce tax increases later this year.

As the day went on, however, Sterling found renewed support following the release of the UK’s preliminary April PMI data, which exceeded expectations in both the manufacturing and services sectors.

The services sector, in particular, drew focus, with activity rising from 50.5 to 52, outperforming forecasts that had pointed to a slowdown towards the 50 threshold.

The data also revealed stronger-than-expected growth in price pressures.

Reflecting on the results, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said that price growth has surged at a pace rarely observed outside of the pandemic period, indicating that inflation may climb higher than many analysts had projected.

Save on Your GBP/USD Transfer

Get better rates and lower fees on your next international money transfer.
Compare TorFX with top UK banks in seconds and see how much you could save.


Compare the Best GBP/USD Rates »

This led markets to revise their expectations for monetary policy, with speculation that the Bank of England (BoE) could still pursue tightening this year helping to underpin the Pound.

The US Dollar (USD) found early support as a cautious market mood boosted demand for safe-haven assets, with investors unsettled by developments in the Middle East.

While the US moved to extend its ceasefire arrangement, Iran signalled it had not formally accepted the agreement, citing the continued US blockade of the Strait of Hormuz. At the same time, reported attacks on vessels in the region added to investor unease.

Ongoing uncertainty and heightened geopolitical tensions dampened market sentiment, helping to underpin the US Dollar.

Short-Term GBP/USD Forecast: UK Retail Sales in Focus

Looking ahead, attention turns to the UK’s March retail sales release on Friday. A slight rebound of around 0.2% growth may offer some support to Sterling, though any upside is likely to be modest.

For the US Dollar, focus will shift to the University of Michigan’s final consumer sentiment reading. If the data confirms a sharp drop in household confidence during April, it could place some pressure on USD.

Broader market sentiment is also expected to remain a key driver of GBP/USD. Continued developments in the Middle East may inject further volatility, with shifts in risk appetite potentially causing fluctuations in the currency pair.

Like this piece? Please share with your friends and colleagues:




International Money Transfer? Ask our resident FX expert a money transfer question or try John’s new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Dollar Forecasts

Source link

Read More
23 04, 2026

Forecast update for EURUSD -23-04-2026.

By |2026-04-23T22:37:41+02:00April 23, 2026|Forex News, News|0 Comments


Natural gas price kept forming weak sideways trading, holding above $2.620 support, but the main indicators contradiction and the continuation of forming an initial resistance at $3.160 obstructs the chances of forming new bullish waves by its fluctuations near $2.720 level.

 

The continuation of forming sideways trading in the current period, reaching below the current support will confirm its readiness to form new bearish waves, to expect targeting $2.390 and $2.250 level.

 

The expected trading range for today is between $5.250 and $2.820

 

Trend forecast: Fluctuated within the bearish trend





Source link

Read More
23 04, 2026

USD/JPY: Scope for further upside towards 160.50 improves amid triangle breakout

By |2026-04-23T22:29:58+02:00April 23, 2026|Forex News, News|0 Comments

The USD/JPY pair extends its four-day upside to near 159.75 during the European trading session on Thursday. The pair reflects strength as the US Dollar (USD) outperforms its peers due to rising oil prices amid the prolonged closure of the Strait of Hormuz.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.20% 0.10% 0.16% 0.03% 0.32% 0.48% 0.11%
EUR -0.20% -0.08% -0.06% -0.17% 0.11% 0.28% -0.11%
GBP -0.10% 0.08% 0.04% -0.09% 0.21% 0.37% -0.03%
JPY -0.16% 0.06% -0.04% -0.14% 0.17% 0.29% -0.06%
CAD -0.03% 0.17% 0.09% 0.14% 0.31% 0.45% 0.06%
AUD -0.32% -0.11% -0.21% -0.17% -0.31% 0.16% -0.27%
NZD -0.48% -0.28% -0.37% -0.29% -0.45% -0.16% -0.40%
CHF -0.11% 0.11% 0.03% 0.06% -0.06% 0.27% 0.40%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.2% higher to near 98.80, the highest level seen in over a week.

Higher oil prices have boosted United States (US) inflation expectations, a scenario that discourages the Federal Reserve (Fed) from easing its monetary policy. According to the CME FedWatch tool, the odds of the Fed holding interest rates steady in the current range of 3.50%-3.75% in the December meeting are 76.8%.

In Thursday’s session, investors will focus on the preliminary US S&P Global Purchasing Managers’ Index (PMI) data for April, which will be published at 13:45 GMT. The US private sector business activity growth is expected to have increased due to improvement in both the manufacturing and the services sector output.

Meanwhile, the Japanese Yen (JPY) trades mixed against its major currency peers, as investors shift focus to the Bank of Japan’s (BoJ) monetary policy announcement on April 28, Tuesday.

USD/JPY technical analysis

USD/JPY trades higher at around 159.75 at the press time. The pair holds a bullish near-term bias amid the sustainability of a Descending Triangle breakout/ Also, rising 20-day Exponential Moving Average (EMA) at 159.11 bollters the near-tem bullish tone. This positioning suggests dips are still being bought, while the Relative Strength Index (RSI) near 57 stays in positive but not overbought territory, hinting that upside momentum is constructive yet controlled.

Looking up, the pair could extend its upside towards an over 21-month high at 160.46; a sustained move above that level would widen the scope for further upside towards 161.00. On the downside, immediate support is seen at the former resistance trend line around 159.41, followed by the 20-day EMA at 159.11. A deeper pullback could challenge the horizontal support of the triangle formation near 157.64.

(The technical analysis of this story was written with the help of an AI tool.)

(This story was corrected on April 23 at 11:59 GMT to say that the USD/JPY pair extends its four-day upside to near 159.75, not its two-day upside.)

US Dollar FAQs

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

Source link

Read More
Go to Top