Forex Markets Update on Major Currencies

FOREX MARKETS – U.S. dollar continues its journey to the top, as it posted two-week high on Monday. Retail sales in the U.S. was an essential factor as investors have seen that the U.S. dollar is a stable currency. This happened just one day before the U.S Federal Reserve’s board of governors will meet in Washington, DC.

This two-day meeting is one of eight regular meetings which takes place every year. This particular gathering gained special attention as investors around the world closely monitor the outcome of this meeting.

The chances that the Federal Reserve will cut the interest rate is low. The probability of a possible price cut as of Friday was around 20%.

It is not the only meeting scheduled for the next few weeks. European Central Bank policymakers will meet in Portugal. Bank of England’s decision regarding the interest rate is expected by Thursday.

The British Pound on the Forex Markets

British Pound, on the contrary, is falling because of a threat of a no-deal Brexit. On Tuesday it was close to repeating the worst result of this year. Since Brexit continues to dominate not only the political landscape but economical as well, due to uncertainty.

Boris Johnson, who has the highest chances to replace Theresa May, is making the investors more nervous. The candidate for the position of Prime Minister is known for his anti-EU viewpoint. He is a supporter of a no-deal Brexit which is fueling the fears.

Thus, the UK might leave the EU without proper agreements, and it might have a negative impact. By doing so, this will undermine the economy of the UK and the global economy in general. In times like this, it is hard to predict what will be the consequences. Forex markets have been feeling political tensions as well.

One British Pound fell to $1.2539 on Monday. Most likely, the depreciation will continue as British retail sales data will come out on Wednesday and Thursday. As mentioned above, the Bank of England will disclose the decision about the interest rate this week. All of the aspects combined will check the strength of British currency. The forex markets will only have to wait.

Australian dollar updates

The Australian dollar is decreasing because of the possible interest rate cut by Reserve Bank of Australia. The RBA’s June meeting signaled a possibility of cuts as bank officials are ready to make this decision to revitalize salary growth and inflation.

The price of one Australian dollar is at $0.6849, which marks the lowest point since January. Trade disagreement between the U.S. and China takes its toll, and the conflict resolution is unlikely during the upcoming days. China is Australia’s biggest export market, which leaves Australian currency and economy as a whole vulnerable to China’s economic policies.

In conclusion, currencies around the world undergo tough times. Brexit at the one hand and trade war on the other makes it harder for the forex markets. Adjusting to ever-changing political and economic challenges require constant observation from the private as well as the public sector.

This week will present new challenges as the investors are waiting how the Federal Reserve meeting will end. Also, the Bank of England’s decision on whether to cut interest rate or not will facilitate to assess the future exchange rate of British Pound.