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19.07.202312:25 Forex Analysis & Reviews: Will dollar recover this year?

Exchange Rates 19.07.2023 analysis

After 10 consecutive increases, the Federal Reserve halted their rate hike cycle, keeping rates between 5% and 5.25% in June, and will likely continue the pause until the July FOMC meeting.

However, Fed Chairman Jerome Powell and several other members of the bank emphasized that this does not signal a shift towards a more flexible monetary policy, as the pause only meant that the Fed needed to assess the effect of the 10 consecutive rate hikes on inflation.

Based on the latest inflation data, the Fed did a good job because inflation stopped growing, with CPI and PPI both showing lower-than-expected data, indicating a weakening inflationary pressure.

In fact, the CPI report confirmed that the aggressive monetary policy had an effect, significantly curtailing the economy.

Furthermore, weaker data released yesterday on retail sales and industrial production fueled expectations of the end of the Fed's rate hike cycle, leading to a decline in Treasury bond yields. This, in turn, helped support low- and zero-yielding assets such as precious metals.

Exchange Rates 19.07.2023 analysis

Now, gold trades around $1800, heading towards $2000.

Exchange Rates 19.07.2023 analysis

Silver broke through $25 and strives to reach April highs.

Exchange Rates 19.07.2023 analysis

The US dollar index has not significantly deviated from its record low of 2023.

*Analisis pasar yang diposting disini dimaksudkan untuk meningkatkan pengetahuan Anda namun tidak untuk memberi instruksi trading.

Irina Yanina,
Analytical expert of InstaSpot
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