Forex Today: Fedspeak takes centre stage alongside weekly ADP figures
The US Dollar (USD) has started the week on a positive footing, rapidly leaving behind two daily drops in a row and refocusing on the upper end of its recent range amid steady bets for extra rate hikes by the Fed and reignited geopolitical tensions.
During the week, the US Dollar (USD) began the week positively, quickly reversing two consecutive daily declines and concentrating on the higher end of its recent range. This shift came with an expectation of additional rate hikes by the Federal Reserve (Fed) and heightened geopolitical tensions. The US Dollar Index (DXY) remained above the psychologically significant 100.00 level as traders anticipated further monetary tightening by the Fed.
Reports on ADP Employment Change for the week and speeches from Fed officials Williams, Jefferson, and Barkin were awaited. EUR/USD experienced renewed downside pressure, breaking two consecutive daily gains and staying below the 1.1500 mark. The European Central Bank (ECB) was scheduled to provide input prior to releasing the preliminary Consumer Confidence data.
GBP/USD mirrored the downturn of similar risk-linked currencies, dipping back into the 1.3370-1.3360 range. Government Spending and the CBI Industrial Trends Orders were set to be disclosed. The USD/JPY pair strengthened past the 157.00 level as the US Dollar regained its bullish momentum. In Japan, the Bank of Japan (BoJ) increased its short-term interest rate target to 1.25% from 1.00%, signaling a shift towards monetary normalization, aligning with expectations that had been circulating for weeks.
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