Forex Exchange: Dollar Strengthens on Global Growth Concerns
The dollar forex exchange reached a six-month high amid China and global growth anxieties. Meanwhile, the yen hovers near a 10-month low, raising concerns in Japan.
The dollar retained its strong position on Wednesday, hovering near a six-month peak, as concerns over China’s economic slowdown and global growth continued to affect risk sentiment. Meanwhile, the yen remained close to a 10-month low, prompting Japan’s top currency diplomat to issue a stern warning.
Yen Forex Patterns Concerns
The yen Forex line trading was at 147.66 per dollar in early Asian hours. The currency stood just below 147.8, a level not seen since November 4th. This has raised alarms, as the currency has remained around the crucial 145 per dollar mark for weeks, leading to suspicions of potential intervention.
Masato Kanda, Japan’s top currency diplomat and vice-minister of finance for international affairs, emphasized the country’s readiness to take action if speculative moves in the yen persist.
Last year, Japan intervened in currency markets in September when the dollar surpassed 145 yen. This intervention by the Ministry of Finance aimed to weaken the yen and bring the pair back to around 140 yen.
Traders and analysts have noted the increased focus on verbal intervention as a response to the yen’s weakening. Christopher Wong, a currency strategist at OCBC in Singapore, commented that officials are likely to engage in more verbal intervention if they perceive one-sided and excessive yen movements.
Forex Chart Patterns
In contrast, the dollar continued to strengthen against a basket of currencies, rising 0.067 forex pips to 104.80. This was close to the six-month high of 104.90 achieved overnight. Concerns over slowing global growth, triggered by economic data from China and Europe, prompted investors to seek refuge in the dollar.
Global Economic Worries
Data from both the eurozone and Britain showed a decline in business activity, while China’s services activity expanded at its slowest pace in eight months in August.
Federal Reserve Governor Christopher Waller indicated that the latest forex day trading data provided room for the central bank to assess the need for further interest rate hikes. Currently, markets are pricing in a 93.00% chance of the Fed maintaining rates later this month. Besides, there is a 55.00% chance of no more hikes this year, according to CME FedWatch.
Other Currency Forex Patterns
The Australian dollar eased by 0.17% to $0.637 following a 1.30% decline on Tuesday. The Reserve Bank of Australia’s decision to keep rates steady was an antecedent of the downturn. The Kiwi also fell, dropping 0.31% to $0.587.
While the dollar forex exchange maintains its strength amidst global growth concerns, the yen’s slide remains a point of worry for Japan, potentially leading to further verbal intervention to address the situation.
The post Forex Exchange: Dollar Strengthens on Global Growth Concerns appeared first on FinanceBrokerage.