CPI m/m came in higher than expected once again for the USD as the annual inflation index hits a 40-year high at 7.5%. This is not a good sign for the currency as the value continues to drop worse than analysts and economists expected. With that said, here are 3 pairs to trade now that we see a weaker and weaker dollar.
When comparing the two currencies, the pound has the USD beat in just about every category. And I think longing this pair is probably your best bet when trading against the USD. BOE has already raised rates and are forecasted to get up to 0.75% to cap inflation and eventually reach their 2% inflation target.
I didn't think I would say this for some time, but Aussie/Dollar looks like a pair to long now. Australia's gold-heavy economy could really benefit from the sinking value of the USD that a 25 bp rate hike can't really fix. Regardless of the long term factors, it looks like we can at least expect this pair to come up to resistance around 0.72785 for a test.
USDMXN is number 3 on the list of pairs to trade, and it is also the riskiest. If you are looking for a speculative play, this pair could end up being very lucrative. As bad as the Mexican peso is, it still has a leg up on the dollar right now. The combination of high inflation, low interest on the USD paired with the peso's high interest rate (5.5%) investors have been taking a risk-on sentiment towards the pair since 2020. Taking a short on this pair, if it moves in the right direction, will not only yield you profit on the trade but also on the hefty interest it pays you to short this pair.
Considerably dovish news from central banks in the US and New Zealand has caused a major stir in the markets. Governor Orr and Vice Chairman Powell both released some reassuring news for the economy in the long term. But what does this mean for USD and NZD? EdgeFinder Analysis GBPNZD is a pair that should […]
As we trade into a broad news week covering the economic status of multiple countries, there are several scenarios we should consider. Although it is impossible to predict the future, we can at least prepare for the news events set to come this week for kiwi, dollar and the pound. EdgeFinder Analysis GBPJPY still maintains […]
Unemployment claims came in less than expected this morning showing healthy signs for the US economy. Stocks have been on a tear since then as the NAS100 is up over 1% and SPX500 up 0.2%. Tech stocks look to be having the strongest day in the market. EdgeFinder Analysis JP225 is now a strong buy […]
