USD Falls Low Followed by BOE and ECB Rates

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Across the Forex landscape, it was truly a big morning today with big data coming up from all over the world. We have received rate decisions from UK, Europe and Turkey. Morning market was highly volatile, driven by US August Inflation and disappointing CPI as well as PPI report. All of these have pushed the USD far downside increasing risk of losing more ground and EUR as well as GBP are making significant progress, which is likely to be continued for the rest of the month.

As this report was being prepared, Eur was being traded at 1.1690, GBP was at 1.3110 and USD was closer to 94 mark, and there is significant chance of increasing the downfall at the later part of the month. The Brexit development, unchanged UK interest rate and ECB report unveiled the prospect of a far deeper move of USD weakness. There had been much enthusiasm in the USD buying position in the last six months, yet the time might have changed soon, just like we have seen last year.

US CPI pattern getting the sellers interested

US CPI since August 2017

Here, we have got US CPI annualized and what does it say? All we can say is it starts to fall after September and this year was no different. Looking at the pattern, it could be estimated that the USD might have hard time ahead of them.

US Dollar Index

Here is a USD one-minute chart and at the moment, USD is being traded at 94.14. However, given the fresh market report and bank decisions, the USD support over 94 regions might not hold for long.

US Dollar 1 minute index

This image shows persistent failure of USD to break above the 95 mark and it was all the same this year as well.

To the bottom lines 

Here, we have got the EUR/USD one-minute chart, and it showed marked difference in the market just after the release of ECB decision, as they are going to decrease the bond purchases from the next month. Along with that decision, there was BoE making no change in their interest rate, smoothening up the downside road ahead for USD along with disappointing CPI report.

EUR USD chart

So, what have we got here?

  • A bold and interesting move by ECB
  • No change in the interest rate by BoE
  • Disappointing US CPI and PPI data, which is likely to get worse in the upcoming months
  • Rate decision from Turkey
  • A chance of increasing interest rate in the upcoming FED meeting, due in 26th September, 2018.

Nonetheless, all of them is pointing USD towards a far bearish move and we might find it well below 93.75 by the end of the month, as the support in 94.10 region might not hold for long.

Read more about USD JYP here.

Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.

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