{"id":14522,"date":"2024-10-23T14:46:00","date_gmt":"2024-10-23T14:46:00","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=14522"},"modified":"2025-02-16T10:55:26","modified_gmt":"2025-02-16T10:55:26","slug":"forex-market-analysis-23-october-2024","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/tr-mena\/analysis\/forex-market-analysis-23-october-2024\/","title":{"rendered":"Forex market analysis: 23 October 2024"},"content":{"rendered":"\n

The US dollar has surged to a two-month high as traders adjust their expectations for the Federal Reserve\u2019s rate cuts, following stronger-than-expected economic data. Meanwhile, the yen has dropped to a three-month low due to rising US Treasury yields, with upcoming political events in both the US and Japan likely to influence market trends further.<\/p>\n\n\n\n

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US dollar strengthens as rate cut expectations ease<\/strong><\/h1>\n\n\n\n

The US dollar remained firm on Wednesday, climbing to its highest level in more than two months.<\/p>\n\n\n\n

Market participants have adjusted their outlook on the Federal Reserve, now expecting a more gradual reduction in interest rates.<\/p>\n\n\n\n

This shift follows stronger-than-expected economic data, prompting traders to reconsider the likelihood of aggressive rate cuts.<\/p>\n\n\n\n

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Yen hits three-month low as US Treasury yields climb and rate cut hopes diminish<\/strong><\/h1>\n\n\n\n

The yen has faced significant pressure, falling to a three-month low of 151.72 against the dollar. This decline has been driven by rising US Treasury yields, with the 10-year note reaching 4.222%, its highest point since July.<\/p>\n\n\n\n

Expectations of a rate cut in November have also softened, with a 91% chance now priced in for a quarter-basis-point cut, compared to a more divided view a month ago.<\/p>\n\n\n\n

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The USD\/JPY chart shows a bullish trend with the price near a key resistance at 151.673 as seen on the VT Markets app<\/a>.<\/figcaption><\/figure>\n\n\n\n

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Although economic data releases have been relatively light, traders are closely monitoring the Federal Reserve\u2019s Beige Book, which will offer further insights into US economic conditions.<\/p>\n\n\n\n

The previous report indicated slowing growth, but recent data suggests a more optimistic picture may emerge this time. If the Beige Book delivers positive surprises, it could further support the US dollar and drive yields higher.<\/p>\n\n\n\n

That said, traders remain cautious, with marginal gains in both the US dollar index and US Treasury yields, reflecting a more measured approach.<\/p>\n\n\n\n

The dollar index, which measures the greenback against six major currencies, inched up by 0.11%, reaching 104.18. The index has gained over 3% this month, buoyed by the shifting expectations regarding Fed policy.<\/p>\n\n\n\n

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US election outlook and its potential impact on the dollar<\/strong><\/h1>\n\n\n\n

Looking ahead to the upcoming US presidential election, traders are also factoring in the possibility of a Republican victory, which is widely seen as a positive for the dollar.<\/p>\n\n\n\n

A recent poll indicates Vice President Kamala Harris holds a narrow 46% to 43% lead over Donald Trump, yet markets are still largely pricing in a Trump win.<\/p>\n\n\n\n

If the political landscape shifts in favour of a Harris victory, traders may start to anticipate a pullback in both the dollar and Treasury yields, given her more cautious stance on inflationary policy.<\/p>\n\n\n\n

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Vice President Kamala Harris holds a narrow 46% to 43% lead over Donald Trump, with voters expressing dissatisfaction with the country\u2019s direction, according to a Reuters\/Ipsos poll. https:\/\/t.co\/QNAlIyOSN5<\/a><\/p>— The Jerusalem Post (@Jerusalem_Post) October 22, 2024<\/a><\/blockquote>