US dollar: A new trend underway? – Standard Chartered

Dhwani Mehta FXStreet

Having forecasted the US dollar to weaken around 7% over the next year, the Standard Chartered Analysts points to a likely beginning of a new trend in the US dollar trading.

Key quotes

“USD has been weakening during NY trading hours over the past few days.

Likely to continue if US asset managers continue selling during the domestic sessions.

If this is the start of a new trend of USD selling during US hours, it could be significant as it would signal that we are entering the middle of the USD smile.

‘Dollar smile’ analysis, the currency tends to strengthen in a crisis, weakens when the global economy is healthy and rebounds again when the US outperforms.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD remains below 0.7000 amid light trading

AUD/USD fills a modest bearish gap on Monday, but remains below 0.7000 in the Asian session amid holiday-thinned liquidity. The US Dollar attempts a bounce even as US bond yields pull back from multi-year highs, limiting the pair. Moreover, diminishing odds of another RBA rate hike in November cap the Aussie.

USD/JPY hovers above 158.00 amid Japan/ US holiday

USD/JPY extends its range-bound price action into a new week, trading above 158.00 as bulls remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, softer US bond yields keep US Dollar bulls on the back foot and cap the pair's upside. However, geopolitical uncertainties could limit losses for the safe-haven buck amid thin liquidity due to a holiday in Japan and the US.

Gold eases from one-week top, falls below $4,200 as hawkish Fed and Iran risks support USD

Gold attracts some sellers after touching a one-week high earlier this Monday, sliding back below the $4,200 mark during the European session and snapping a two-day winning streak. The US Federal Reserve's hawkish outlook helps limit the downside for the US Dollar, and caps the non-yielding bullion. Meanwhile, crude oil prices fell amid hopes that the Russia-Ukraine energy ceasefire deal will ease global fuel shortages and, in turn, reduce inflationary risks.

Cardano holds above EMAs as recovery builds

Cardano (ADA) reclaims trading above the key support zone on Monday after a 2.85% correction last week. Improving derivatives positioning and constructive technical outlook support a recovery for ADA. Derivatives data shows an improving sentiment among Cardano traders. CoinGlass’ long-to-short ratio for ADA reads 1.01 on Monday, flipping into green territory.

USD/INR: Deep in red below 96.00 as RBI rescues Indian Rupee

After opening significantly higher against the US Dollar (USD) on Monday, the Indian Rupee (INR) clings to recovery gains near 95.80. The pair remains undermined by the Reserve Bank of India’s (RBI) fresh measures to curb US Dollar demand, which has brought relief for the Indian currency.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?