FX News

FX Update: Big Dollar in Charge

Market Overview:

Key Points:
• The World Bank has slashed economic growth in China for 2022
• RBNZ’s Orr says there is still room to continue tightening policy/interest rates however the cycle is well advanced
• Predicted Federal Reserve hikes: November 75 points, December 50 points, January 2023 25 points and February 2023 also 25 points
• Markets have turned from the view of speculating on a global recession to pricing one in
• The Bank of Japan (BoJ) has intervened in the Japanese Yen for the first time in over two decades to stem the collapse of the currency. We expect more of this to take place- the (JPY) is trading at 144.80 agst the greenback after returning from 140.00 post the headline
• The British Pound (GBP) has slid to its lowest level against the US Dollar on record sinking Monday below the previous Feb 1985 level to 1.0274
• US Dollar index is predicted to be above 118 at year end from 114 now, this suggests further downward bias in store for crosses
• The US Dollar (USD) has been the strongest currency in September while the British Pound (GBP) and New Zealand Dollar (NZD) have been the worst performing

Major Announcements last week:
Canadian CPI 5.7% y/y forecast 5.6%
Federal Resserve raise rates 75 points to 3.25%
Bank of England raise cash rate 50 points to 2.25%
US Manufacturing prints soft at 51.8

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