• Frontloading rate hikes is a good idea in this situation
• It means that we can stop inflation before it becomes entrenched
• Would like for rates to move up to 3.50% by year-end

Central banking these days have never really been about going „according to plan“. Remember when policymakers were telling us that inflation was just ‚transitory‘? The last echoes of that sentiment wasn’t even a year ago. Pfft.

This article was written by Justin Low at www.forexlive.com.

• Households have much savings from the pandemic
• No sign from households that they are pulling back on spending meaningfully
• Labour market is very strong
• Rate hikes will slow down the economy but only slow it down to trend growth
• There will just be a moderate slowdown in the economy, not a major one
• It will be unusual to return to a recession unless there is a big shock
• We are not even near neutral rate yet to control inflation, so too early to talk about recession probabilities

There isn’t anything here that suggests that he is on the same page as Powell about demand destruction and he is certainly going out of his way to reassure that a recession isn’t imminent in the US.

This article was written by Justin Low at www.forexlive.com.

• Australian economy is remarkably resilient
• The challenge is to bring down inflation painlessly

Just some token remarks by Lowe in a speaking engagement. After delivering some rather unorthodox rate hikes recently, it will be interesting to see what the RBA will go with next on 5 July.

This article was written by Justin Low at www.forexlive.com.

While the yen stole the spotlight in trading yesterday, the franc continues to do its work steadily following the SNB policy pivot two weeks ago. As mentioned then, the change has definitely shaken up the landscape of the major currencies bloc and puts the franc at among the frontrunners considering the timing of the surprise and how shaky markets look at the moment.

The swissie is the top performer today with USD/CHF itself down 0.5% to 0.9565 while EUR/CHF is testing daily support from the April lows at 1.0088-89 again currently. A firm break below that opens up another shot at parity for the pair and this time there might be more conviction to break that after the attempt in March failed.

• Parity now the new normal in EUR/CHF – Credit Agricole (22/06)
• EUR/CHF: Core target at 0.9830; ‚measured triangle objective‘ at 0.9600 – Credit Suisse (20/06)
• Parity beckons for EUR/CHF (17/06)

This article was written by Justin Low at www.forexlive.com.

Equities are producing a rather solid rebound on the session now with S&P 500 futures climbing by ~27 points to 3,790, or up 0.7%, on the day. That compares with earlier where it fell by ~28 points to 3,735, or down by 0.7%, after the dismal PMI readings from France and Germany. However, the optimistic turnaround is not broad-based as mentioned here.

In FX, the dollar and yen are still holding on to gains mostly. EUR/USD is down 0.5% to 1.0505 with the low earlier touching 1.0485 and testing the 200-hour moving average:

Buyers are holding on to that for now with large expiries at 1.0500 perhaps also a factor on the day.

Meanwhile, GBP/USD is down 0.5% to 1.2205 but the low earlier came in near 1.2270 and the pair caught a bounce of some near-term support highlighted here.

Elsewhere, USD/CAD is holding a little higher at 1.2960 – up just 0.1% on the day and AUD/USD is down 0.5% to 0.6890 with sellers not letting up just yet despite the turn in the risk mood.

This article was written by Justin Low at www.forexlive.com.

3 decades ago,
investing was an activity which was reserved for a select few over on Wall
Street. Today, however, virtually anyone can access the market right out of
their pocket.

 

Technology advanced to
the point in which we can buy and sell assets like stocks, crypto, or
currencies with just a little tap on our phone.

 

Forex trading is no stranger to this
transformation as it felt the technological advance in remarkable ways.

 

Friction was severely
reduced for forex traders

 

Traders can now log on
to their preferred digital investment platform and have a wide range of
currencies from which they can choose to trade. Trades are now more efficient,
and cost-effectiveness has also greatly improved.

 

Accordingly, costs are
now low, settlement speed has greatly increased, and transparency has been
massively improved.

 

Technology is a synonym
of inclusiveness in Forex trading

 

All of the factors
described above have greatly contributed as drivers of innovation and
competition, as they made the inclusion of new technologies such as
machine-learning and artificial intelligence a reality in trading.

New technologies have also
made forex trading a more inclusive process as they reduced its costs, thus
creating overall benefits, but also by powering innovation hubs in newly
emerged markets across the world.

 

Centers for financial
technology and digital hubs have risen across the globe further strengthening
the value chain by empowering FX growth and FX fast growing capital.

 

But as companies sprout
everywhere it is important to find and stick with the best forex technology
provider

 

With several new
platforms and forex software providers appearing out of nowhere many will agree
that we’ve seen the democratization of forex.

The issue with forex
liberalization in the early 21st century was that the companies which spawned
we’re basically forex providers with a one-track business model: undercutting
banks.

 

As such, they would
usually charge an opaque mark-up on their clients instead of a transparent fee.
However, what investors really wanted lied beyond an undercut.

 

Whether through easy
access to the markets, a wide range of instruments or a simple training
analysis view, traders wanted to be empowered by their brokers.

 

Consequently, reliability
is a quality which only a select few brokers have earned over the years

 

In fact, transparency
and reliability are probably the most important things in the trading sector.

 

This is why reliable
brokers get recognized as such. Looking back at this year’s Ultimate Fintech
2022, one of the most prestigious and reputable events in the world of finance,
one can see how FxGrow took the lead by winning both the Most Reliable Broker
award and the Best White Label Solution award.

 

 

FxGrow has been winning awards consistently over
the years making it a great example of how a reputable forex broker establishes
itself and puts their clients first.

So, what exactly is the
future of forex?

 

What the future of
forex will look like is still up in the air. Some claim that with its growing
popularity it might be headed towards a blockchain solution.

 

Others will say that it
is important to reduce friction as much as possible first, that forex trading
needs to be done quicker and in a more cost-effective manner.

 

Regardless of where
forex is headed, finding a reliable and transparent broker, one which you will
be glad to have by your side is mandatory.

This article was written by ForexLive at www.forexlive.com.

• Prior -1

UK retailers continue to report falling sales in June, with the report highlighting that they are also expecting sales next month to be well below normal for this time of the year. If anything else, this just underscores the fallout amid the cost-of-living crisis that is weighing on consumption activity. CBI notes that:

„Retail volumes are struggling as high inflation eats away at consumers‘ budgets. The squeeze on household income appears to have offset any boost to activity from the extended Platinum Jubilee bank holiday earlier this month.“

This article was written by Justin Low at www.forexlive.com.

It’s shaping up to be a risk-off day as the storm clouds are weighing on market sentiment again after a bit of a breather in the first two days this week. European equities are down heavily across the board and we’re now seeing key indices start to hit their lowest levels since March in trading today.

The DAX is down 2.3%, CAC 40 down 1.9%, and FTSE MIB down 2.3% and are all looking poised for a potential drop towards their respective March lows:

The losses aren’t contained to European indices as US futures are also enduring a torrid time so far on the day. The S&P 500 gained by ~90 points in trading yesterday but futures are pointing to a ~70 points decline, or down 1.9%, at the moment.

Higher and more persistent inflation, central bank tightening and a deteriorating economic outlook continue to present a major challenge to the market landscape for the time being. The worst part? It doesn’t look like those dispositions will change any time soon.

This article was written by Justin Low at www.forexlive.com.

Bitcoin
rallied from $20.5K to $21.6K during the day on Tuesday but later reversed to
decline and went back on Wednesday morning. Ether corrected deeply, losing 4.4%
over the last 24 hours. The top ten altcoins showed mixed dynamics, ranging
from a 6.5% decline (Solana) to a 3.6% gain (Dogecoin).

 

Total crypto
market capitalisation, according to CoinMarketCap, declined 1.9% to $900bn.
Bitcoin’s dominance index dropped 0.2 points to 43.5%. The Cryptocurrency Fear
and Greed Index is up 2 points to 11 by Wednesday and remains in a state of
“extreme fear”.

 

After a
strong move down last week and a retreat from the extremes on Sunday, BTCUSD
failed to gain ground with buyers and remained pegged at the round level of
$20K.

 

Bitcoin’s
recent drop below $20K triggered a new wave of deleveraging and liquidations
that affected miners and long-term investors, Glassnode claims.

 

Ethereum
co-founder Vitalik Buterin criticised the popular Stock-to-Flow model for
predicting bitcoin exchange rates, saying it is wrong and only gives people
unwarranted confidence in the predetermination of exchange rate movements.

Investors
are buying bitcoin despite the market’s decline. According to CoinShares,
crypto funds saw capital outflows of $39m last week, while there were inflows
of $28m into BTC.

 

Investors
have, in our view, false confidence in their strengths. It is commonly believed
in the media that retail investors were the first to buy out the 2020 bottom
and who managed to beat the funds in 2021 using the r/wallstreetbets forum.

 

But then the
Fed and many other central banks, along with governments, were on the buyers’
side, conducting unprecedented policy easing and handing out monetary stimulus.
Now they are doing the opposite: rolling back support programmes and raising
rates at the highest rate in decades.

 

Retail
shoppers risk being caught swimming against the financial current, which is
hardly a successful strategy. History suggests that enthusiasts risk running out
of steam soon, being left with depreciating assets, and losing confidence for
years that equity or cryptocurrency markets are a worthwhile place for their
money

 

This article was written by FxPro’s Senior Market Analyst Alex
Kuptsikevich.

This article was written by FxPro FXPro at www.forexlive.com.

• The new tool should be different as circumstances are not the same
• It will be different from PEPP, APP or OMT programmes

The OMT was designed to cater more towards a crisis of solvency a decade ago and that isn’t exactly the main challenge that the ECB is facing right now. It is arguably the tool that has the closest set of characteristics desired by the central bank to counter fragmentation but it offers up a lot of political challenges as well. Don’t expect Italy to sign up for any of that.

Ideally, the new tool should come with the right kind of economic components offered up from the OMT but without the political stipulations. It is going to be hard to do that while having to navigate backlash from its own members, especially Germany. So, we’ll have to see how creative policymakers can be in the weeks/months ahead.

This article was written by Justin Low at www.forexlive.com.