The US Dollar is on the rise again after the latest US economic releases. USD increased to 114.61 which is 0.45% higher than today’s open price and the highest so far this year. “Cash is king” has never seemed more true as the US Dollar refuses to give up gains and continues to climb. Yesterday’s US Consumer Confidence Index and New Home Sales only seemed to boost USD’s price movement.
GBP/USD
The GBP/USD pair is currently trading within a descending triangle pattern which is known to indicate a break in the trend. The price is currently trading at 40% of the earlier decline but the bearish price movements remain higher so far. Today’s candlestick is negative for now but many traders are waiting for the price to form a bearish breakout of the 1.0623 level before trading the trend further.
GBP/USD 1-hour chart on September 28th
The price of the US Dollar was supported by the Consumer Confidence Index which climbed to its highest level in 5 months. The Index was predicted to remain at the same level as the previous month due to another 75 basis point increase, however, the price increased significantly to 108.0.
The new rate increase was specifically expected to pressure the property market as mortgage interest rates have reached a new high. However, the US economy remains resilient. The New Home Sales increased from 532,000 to 685,000 instead of declining to 499,000 as expected.
Federal Reserve member, Mr Charles Evans, advised the markets that he believes the Federal Fund Rate will increase to 4.5% before the end of the year and that rate hikes will most likely come to an end in the first 3 months of 2023. The official said he remains optimistic that the US economy will be able to avoid a long recession, but this will only happen in the absence of new foreign policy shocks.
NASDAQ
NASDAQ remains under pressure for the 15th consecutive day. The price has declined by 13% after the latest inflation figures and interest rate hikes. The index also continues to decline during this morning’s futures market. Today’s decline currently measures at 1.85% and has taken the price to lows last seen on June 17th. The bearish price movement has also brought the price down to the previous support level as mentioned yesterday.
NASDAQ 1-hour chart on September 28th
The Wall Street Journal advised that the IPO figure is one of the major pressures on the stock market. According to the report, almost 90% of IPOs in the previous year are now trading below the offered price. IPO cost statistics look even more alarming for traders. Last year, the total value of US exchange placements was $154.0 billion, but in 2022, that number dropped down to $7.2 billion, which is the lowest figure in the last 10 years.
News coming from Apple is also piling on the pressure. According to the latest report from Bloomberg, Apple has decided to ditch previous plans to increase production of their new iPhone. According to the company, the decision has been taken due to the current risks of a recession and lower demand.
Quick Summary:
- US Dollar Index reaches new highs.
- US economic figures continue to improve and show resilience.
- Fed members remain optimistic on the economy as long as there are no further external pressures.
- Stock markets remain under pressure, with IPOs declining significantly.
- Apple ditches plans to increase production as it foresees a global recession.
