The war in Ukraine allowed the USD to open the week with price gaps in its favour. Investors are seriously worried about the lack of dollar liquidity. Let us discuss the Forex outlook and make up a EURUSD trading plan.
Weekly US dollar fundamental forecast
Markets are on the verge of a once-in-a-lifetime restructuring. No wonder investors are in a panic. Russia is moving along the Iranian path, but the timeframe has been shortened to a few days. Furthermore, it is a G20 economy and a major exporter of raw materials. It’s a 10 out of 10 on the scale of the sanctions, but the West isn’t going to stop, and Ukraine’s resistance could turn uncertainty into a long-term factor. Therefore, the US dollar is naturally strengthening.
The greenback has such benefits as high demand for safe-haven assets and expectations of a rate hike by the Fed after the disconnection of some Russian banks from SWIFT. Furthermore, another USD advantage is the lack of dollar liquidity. Skipping payments and giant overdrafts make the current situation similar to that of March 2020, when the Fed had to bail out dollars amid a pandemic panic. The highest demand for the US dollar allowed it to open the week ending March 4 with a gap against a basket of major currencies.
The war in Ukraine allowed the USD to open the week with price gaps in its favour. Investors are seriously worried about the lack of dollar liquidity. Let us discuss the Forex outlook and make up a EURUSD trading plan.
Weekly US dollar fundamental forecast
Markets are on the verge of a once-in-a-lifetime restructuring. No wonder investors are in a panic. Russia is moving along the Iranian path, but the timeframe has been shortened to a few days. Furthermore, it is a G20 economy and a major exporter of raw materials. It’s a 10 out of 10 on the scale of the sanctions, but the West isn’t going to stop, and Ukraine’s resistance could turn uncertainty into a long-term factor. Therefore, the US dollar is naturally strengthening.
The greenback has such benefits as high demand for safe-haven assets and expectations of a rate hike by the Fed after the disconnection of some Russian banks from SWIFT. Furthermore, another USD advantage is the lack of dollar liquidity. Skipping payments and giant overdrafts make the current situation similar to that of March 2020, when the Fed had to bail out dollars amid a pandemic panic. The highest demand for the US dollar allowed it to open the week ending March 4 with a gap against a basket of major currencies.
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