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Home ANALYSIS

The EUR is the strongest and the AUD is the weakest as NA traders enter for the day

A.R Chowdhury by A.R Chowdhury
March 14, 2022
Reading Time: 8 mins read
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The EUR is the strongest and the AUD is the weakest as NA traders enter for the day

Forex

The strongest to weakest of the major currencies

The EUR is the strongest and the AUD is the weakest as the NA session begins. China becomes an important driver as Shenzhen was put under lockdown due to Covid outbreak. Shenzhen is an important manufacturing hub in China. The Jilin region was also fresh lockdown measures. Hong Kong is also suffering from an outbreak of omicron. In separate news, US and China officials will be meeting in Rome in an attempt to limit/stop any aid that the Chinese may provide Russia that would undermine sanctions.

In Ukraine, there is further hopes for peace as officials suggested there may be soon produce a draft agreement. IN US, officials are supporting the idea that Russia is showing signs of movement toward agreement. Meanwhile, Russian military aggression in Ukraine continues unabated.

Crude oil is moving lower on the back of potential peace and lower demand from China lockdown.

US yields are higher. US stocks had the Dow up over 400 points but is up about 1/2 that gain currently. The Nasdaq has moved into negative territory.

The calendar in the US is empty with the  Federal Reserve 
Federal Reserve

The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the US while buttressing a financial system for the country. Its general duties are setting and guiding monetary policy and overseeing effective economic operation, both of which are at the service of the public interest.How the Federal Reserve Affects ForexThe Fed can materially impact the US dollar by virtue of the interest rate it sets, measured by the Board of Governors of the Federal Reserve System. The current interest rate and the expectations of future interest rate changes can influence the value of the US Dollar. For example, if traders anticipate a change in interest rates based on announcements from the Board of Governors, this can cause the US dollar to appreciate or depreciate in value against other currencies.Forex traders should always be aware of meetings and announcements from the Fed and should keep track of developments within the central bank.Ultimately, the Federal Open Market Committee (FOMC) holds eight regular meetings per calendar year, where policies and interest rates are discussed and agreed upon. The best course of action is to keep up with news ahead of these meetings as a forex trader to make predictions about interest rates, and whether to buy or sell the US dollar.

The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the US while buttressing a financial system for the country. Its general duties are setting and guiding monetary policy and overseeing effective economic operation, both of which are at the service of the public interest.How the Federal Reserve Affects ForexThe Fed can materially impact the US dollar by virtue of the interest rate it sets, measured by the Board of Governors of the Federal Reserve System. The current interest rate and the expectations of future interest rate changes can influence the value of the US Dollar. For example, if traders anticipate a change in interest rates based on announcements from the Board of Governors, this can cause the US dollar to appreciate or depreciate in value against other currencies.Forex traders should always be aware of meetings and announcements from the Fed and should keep track of developments within the central bank.Ultimately, the Federal Open Market Committee (FOMC) holds eight regular meetings per calendar year, where policies and interest rates are discussed and agreed upon. The best course of action is to keep up with news ahead of these meetings as a forex trader to make predictions about interest rates, and whether to buy or sell the US dollar.
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set to start their 2-day meeting tomorrow. The decision will be announced at 2 PM tomorrow with expectations of 25 basis points (although some may argue for a full 50 BPs as the Fed is increasingly behind the curve). Later this week, the UK is to continue it’s tightening trajectory with its third hike that will take the target rate to 0.75%.

A snapshot of the market is showing:

  • Spot  gold 
    Gold

    Gold is the most widely traded and important commodity. Prized for its historical importance and used for trading an exchange of goods, the gold market today is estimated at nearly $2.4 trillion.The value of gold fluctuates constantly, as it trades on public exchanges where it has a price that is determined by supply and demand. Gold has historically had tremendous significance and even today is extremely sought after. Gold has been used as a currency as it doesn’t corrode, and the material allows for some absorption of light creating a yellow glow, which lends the name yellow metal.Ultimately, institutional and retail investors buy and sell gold contracts or physical gold, thus creating the demand and supply flow.This can be pure speculation, to acquire or distribute physical gold, or as a hedge for commercial application. For day-traders, the purpose of trading gold is to profit from its daily price movements.How to Trade GoldDay-trading gold is speculating on its short-term price movements. Of note, physical gold is not actually handled or taken possession of, rather the transactions take place electronically and only profits or losses are reflected in the trading account.There are a number of ways to ultimately trade gold. Retail brokers typically offer exposure to gold through contracts-for-difference (CFDs).Beyond retail brokers, the main way to trade gold is via a futures contract. This represents an agreement to buy or sell something, i.e. gold at a future date. Buying a gold futures contract doesn’t mean you actually have to take possession of the physical commodity.Day traders close out all contracts (trades) each day and make a profit based on the difference between the price they bought the contract and the price they sold it at. However, on a futures exchange, gold moves in $0.10 increments only. This increment is known as a tick. It is the smallest movement a futures contract can make. If you buy or sell a futures contract, how many ticks the price moves away from your entry price determines your profit or loss.

    Gold is the most widely traded and important commodity. Prized for its historical importance and used for trading an exchange of goods, the gold market today is estimated at nearly $2.4 trillion.The value of gold fluctuates constantly, as it trades on public exchanges where it has a price that is determined by supply and demand. Gold has historically had tremendous significance and even today is extremely sought after. Gold has been used as a currency as it doesn’t corrode, and the material allows for some absorption of light creating a yellow glow, which lends the name yellow metal.Ultimately, institutional and retail investors buy and sell gold contracts or physical gold, thus creating the demand and supply flow.This can be pure speculation, to acquire or distribute physical gold, or as a hedge for commercial application. For day-traders, the purpose of trading gold is to profit from its daily price movements.How to Trade GoldDay-trading gold is speculating on its short-term price movements. Of note, physical gold is not actually handled or taken possession of, rather the transactions take place electronically and only profits or losses are reflected in the trading account.There are a number of ways to ultimately trade gold. Retail brokers typically offer exposure to gold through contracts-for-difference (CFDs).Beyond retail brokers, the main way to trade gold is via a futures contract. This represents an agreement to buy or sell something, i.e. gold at a future date. Buying a gold futures contract doesn’t mean you actually have to take possession of the physical commodity.Day traders close out all contracts (trades) each day and make a profit based on the difference between the price they bought the contract and the price they sold it at. However, on a futures exchange, gold moves in $0.10 increments only. This increment is known as a tick. It is the smallest movement a futures contract can make. If you buy or sell a futures contract, how many ticks the price moves away from your entry price determines your profit or loss.
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    is down -$23.61 or -1.19% at $1964.66
  • Spot silver is down -$$0.56 or -2.17% at $25.29
  • WTI crude oil is down -$4.99 at $104.34
  • Bitcoin is trading at $38900 after trading in a relatively narrow range over the weekend between $37567 and $39458

IN the premarket for US stocks:

  • Dow is up 234 points after falling -229.88 points on Friday
  • S&P is up 15.44 points after falling -55.19 points on Friday
  • Nasdaq is down -31 points after falling -286.15 points on Friday

In the European stock market, the major indices are pointing higher in trading today:

  • German Dax +1.9%
  • France’s CAC +1.05%
  • UK FTSE 100, +0.25%
  • Spain’s Ibex 0.8%
  • Italy’s FTSE MIB +1.5%

In the US debt market, the snapshot shows a continuation to the upside in yields. The benchmark 2 and 10 year yields are at the highest level since July 2019 ahead of the FOMC decision on Tuesday:

US yields

US yields are higher

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European benchmark yields are also trading mostly higher

Europe yields

European benchmark 10 year yields
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A.R Chowdhury

A.R Chowdhury

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