1. US Debt and Dollar Depreciation
The US Senate is debating an ambitious $3.3 trillion fiscal package, fuelling concerns about rising debt. The dollar has lost ground against the euro, hitting its lowest level in nearly four years.
Forex Impact: Dollar weakness favors crosses such as EUR/USD and GBP/USD. Possible rate speculation, with prospects of Fed cuts.
2. NATO Summit and Increased Defense Spending
At the NATO summit in The Hague, the commitment is to increase to 5% of GDP by 2035. This strengthens European government bonds and the dollar, in view of a safe-haven and new flows into the USD.
Forex Impact: Support for the USD, increased volatility on crosses linked to the euro and sterling, potential trade on EUR/USD and GBP/USD.
3. Taiwan dollar appreciation
The Taiwan dollar jumped 2.5% as local insurers hedge against dollar decline.
Forex Impact: Dollar depreciation slows; Asian crosses such as USD/SGD and USD/KRW under pressure.
4. Global dollar weakness
Euro bounces above 1.17 and USD/CHF below 0.80 on weak macro data and Fed cut speculation.
Forex Impact: Open to long EUR/USD, short USD/CHF strategies, with potential carry trades.
5. Israel-Iran Ceasefire & Geopolitical Risk
Israel-Iran fighting ends, but tensions remain. Markets are monitoring the fallout on oil and safe assets.
Forex Impact: Possible increase in geopolitical volatility, with USD, JPY, CHF as a hedge; volatility on oil influences crosses that contain commodities (AUD/USD, CAD/USD).
Hi, I'm Andrea Russo, a forex trader, and today I want to talk to you about the impact of the latest global news on currency markets.
🏛️ US debt and fiscal tensions
The 3.3 trillion fiscal package under discussion in the United States has weakened the dollar. This weakness fuels opportunities on EUR/USD and GBP/USD, with potential upside on long positions, but beware of future Fed interventions.
⚔️ NATO towards 5% of GDP for defense
The NATO Summit in The Hague marked a paradigm shift: more defense spending means bond issuance and USD flows as a safe-haven. This supports the greenback, making European crosses volatile.
💱 Forex Asia: the case of the Taiwanese dollar
Yesterday's rise in the Taiwan dollar is a clear sign of protection against USD weakness. Unicorn to watch for those betting on emerging crosses in Asia.
💶 EUR/CHI and euro crosses recovering
EUR/USD rises above 1.17 and USD/CHF falls below 0.80: perfect timing for strategic longs. The market is discounting falling Fed rates, amplifying the momentum on the euro.
🛡️ Geopolitics: fragile truce and geopolitical risk
The truce between Israel and Iran currently limits the impact but does not eliminate the risk: safe haven assets such as USD, JPY and CHF remain under pressure for future eventualities.
🎯 Conclusion and trading opportunities
Long EUR/USD on euro momentum and USD reflux
Monitoring GBP/USD for macro sentiment
Watch out for USD/CAD, AUD/USD for oil shocks
This article was created with the support of our Broker Partner PEPPERSTONE.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.