The US dollar and its impact on global markets

Its effect is linked to the influence of foreign currencies, thus raising interest rates from the previous reserve policy to increasing the investment attractiveness of the US dollar. In return, central banks lower interest rates to stimulate economic growth and reduce the cost of borrowing, which leads to a weakening of the value of their currencies.

It is expected that the US Central Bank will continue to raise interest rates during the coming period, which will support the continued rise in the value of the US dollar. However, this rise may be temporary, as analysts at UBS are adjusting their policies to increase interest rates in the near future, affecting the balance of power between currencies.

In addition, there are also other partners in US-American power. For example, future global geopolitical issues could lead to fluctuations in the easily accessible currency market on the US dollar. Moreover, the overall monetary and trade policy influence of the United States could contribute to improving the value of the US dollar.

Overall, the US dollar started to rise in the specified period, but at a slower pace. Investors should follow the traditional monetary policy experiences of major banks and global tensions in the direction of the US dollar to determine the optimal investment.

Since investors often view the US currency as a safe haven, it is also likely to have benefited from the political uncertainty surrounding the French legislative elections – where the first round of voting will take place next Sunday.

It should be noted that the US dollar has risen by about 14% against the yen since the beginning of the year, exceeding the 160 level this week to push the Japanese currency to its weakest levels since 1986. The euro, which is the largest component of the dollar index

Expectations of the dollar’s movement following the release of the Fed’s preferred inflation data

The active US dollar may be under additional active pressure in near term. This has led to victory of US President Donald Trump in the upcoming election, raising the quality levels in the United States, given the likelihood of anything more lenient being followed should the Republican Party be permanently in power.

Life could also lead to the alternative French elections that will be held in the coming days in a backward manner, if the results are in favor of the right-wing or right-wing party. However, the US bank is holding back on taking measures to mitigate the strength of US economic growth, which will prompt the Fed to cut credit rates from September. It also assumes that the dollar, which is considered highly valued, will face downward pressure as markets begin to evaluate the Fed’s interest rate cutting cycle. UBS may consider that resources related to the value of the fiscal deficit may be another long-term pressure factor.

A sharp decline in core public spending in May to 0.1%, compared to 0.2% in index in April, may encourage US Fed policy to cut interest rates later this year, which could negatively impact the performance of the US dollar.

According to financial analysts, expectations have not been fully tested for first drop in US interest rates before the Federal Reserve’s November meeting. Therefore, if the US central bank’s preferred inflation indicator declines, is there room for interest rate cuts in the near term, and immediate interest in a rate cut in September, adding downward pressure on the dollar’s movement. On the latter side, it indicates that the most influential challenges facing American Americans are related to political issues, and it is clear that the assumption of presidency in the United States will have a positive impact on the dollar.

Where is the dollar going?

The US dollar saw it reach the top of the European Union’s trading on Friday, heading towards a second straight quarter, while the Euro and the Japanese Yen began to be watched by other organizations.

At 04:00 EST (09:00 GMT), the dollar index, which measures the greenback against a basket of six other currencies, was trading at 105.705, slightly up 0.1%, and on track for a 1.5% rise in the second quarter. Its rates continued to rise after the discussions, and it is expected that consumer personal data will increase later. The demand for the US dollar, as it is expected to achieve its partial gains annually in a row, and expectations of a decline in US interest rates within six months.

The dollar has been up 5% defensively this year so far. However, the Reserve Treasury’s preferred indicator, the Personal Economy Index, is expected to be released later in the review and is expected to show your growth rate to 2.6% in May. Although this rate would remain above the Fed’s 2% target in the medium term, it could open the door to cuts later this year.

Researchers at ING noted that they had not first assessed a comprehensive outlook for a Fed rate cut until November, so there may be room for a US rate cut in the near future with the immediate focus on a rate cut in September. The United States also received support overnight due to the disappointing performance, as it was present in the first presidential race late on Thursday, which increased the chances of the candidate winning an apology.

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