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Emerging Markets Struggle as the Mighty Dollar FlexesThe recent strength of the US dollar is posing a significant challenge for emerging markets around the world. Their currencies are weakening, creating a ripple effect across their economies. This article explores the reasons behind the dollar's dominance, the impact on emerging markets, and potential policy responses. A Rising Dollar: The Driving Forces The US dollar has been on a tear in recent months, appreciating against most major currencies. This surge can be attributed to several factors, including: • US Federal Reserve Policy: The Federal Reserve's aggressive interest rate hikes aimed at curbing inflation are attracting investors seeking higher returns on dollar-denominated assets. This increased demand strengthens the dollar. • Global Economic Uncertainty: As concerns about a global economic slowdown grow, investors flock to the perceived safety of the US dollar, seen as a safe haven asset during times of turmoil. • Geopolitical Tensions: The ongoing war in Ukraine and heightened tensions between the US and China are further fueling risk aversion, pushing investors towards the dollar. Emerging Markets Under Pressure The rise of the US dollar presents a major headache for emerging markets. Weakening local currencies lead to several problems: • Imported Inflation: When the local currency weakens, the cost of imported goods rises. This can exacerbate inflation in emerging markets, which are already grappling with rising prices due to global supply chain disruptions. • Debt Burden: Many emerging market economies have significant dollar-denominated debt. A weaker local currency increases the cost of servicing this debt, putting a strain on government finances. • Capital Flight: The strengthening dollar can trigger capital outflows from emerging markets as investors seek better returns elsewhere. This can lead to currency depreciation and hinder economic growth. Policy Responses: Verbal Intervention and Beyond Emerging markets are not sitting idly by as their currencies weaken. Several are exploring policy options to counter the dollar's might: • Verbal Intervention: Central banks in some emerging markets, like Malaysia, have resorted to verbal intervention, signaling their commitment to supporting their currencies. However, this approach has limited long-term effectiveness. • Interest Rate Hikes: Some central banks, such as Brazil, are considering raising interest rates to attract capital inflows and stabilize their currencies. However, this risks slowing down economic growth. • Currency Intervention: Central banks may intervene directly in the foreign exchange market by selling dollars and buying local currency to prop it up. This approach can be expensive and depletes foreign exchange reserves. JPMorgan and ANZ Weigh In: The Need for More Tools Financial institutions are also analyzing the situation. JPMorgan Asset Management suggests that more verbal intervention may be necessary from emerging markets to manage volatility. However, analysts at ANZ bank believe that China, a major emerging market with significant influence, may need to deploy a wider range of tools, potentially including capital controls, to limit the depreciation of its currency, the yuan. Looking Ahead: A Delicate Balancing Act The coming months will be critical for emerging markets. Central banks face a delicate balancing act, trying to tame inflation without stifling economic growth. The strength of the US dollar will be a major factor influencing their decisions. The ability of emerging markets to navigate this challenging environment will have a significant impact on the global economic outlook.
TVC:DXYLong
by bryandowningqln
🚨DXY Index Is Ready to Go Down by H&S Pattern🚨🏃‍♂️ DXY index is moving near 🔴 Heavy Resistance zone($105.88-$104.65) 🔴. 📈In terms of Classical Technical Analysis , the DXY index has succeeded in forming an Ascending Broadening Wedge Pattern and is currently completing the right shoulder of the Head and Shoulders Pattern . 💡Also, the Regular Divergence (RD-) between the right and left shoulders of the H&S Pattern is clearly visible. 🔔I expect the DXY index to continue its decline after breaking the 🟢 Support zone($104.26-$103.88) 🟢 around $103 . U.S.Dollar Currency Index ( DXYUSD ) Analyze, 4-hour time frame⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy; this is just my Idea, and I will gladly see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
TVC:DXYShort
by pejman_zwin
1
DOLLARINDEX REACH DAILY TARGET 103.200 Life happen for you not to you.. those who fail to plan, plan to fail.. Traders our discipline and consistency prevail again today. If you don't fail you are not even trying, don't complain about the trades you lost and the money you did not make.. A lot of people spend dollar but do not make money from it.. With detailed analysis we have prepared ourselves for success by just preparing for one bag. DXY drop from 104.000 to 103.300- .200 area. We bagged 200 pips from GOLD You have a skill that only 3% of the world population have, that why you should not quit. I will never quit.. I love trading.. Today is successful Looking forward to tomorrow. Thanks for trading with me today.
TVC:DXYShort
by stuckinprofit
DXY - 4H bullish signsBased on the chart, my bullish stance on the DXY (U.S. Dollar Index) is due to the clear pattern repetition visible in the price action. The Index has formed what appears to be a bullish channel pattern, showing higher lows and higher highs within a confined range. The recent break above the consolidation zone within the channel suggests a continuation of the uptrend. The repeated ability of the DXY to bounce off the lower trend line of the channel and push through the upper bounds demonstrates a strong underlying buying pressure. Historically, patterns like these can often precede further upward movements as the market respects the established trend. This technical analysis implies that the DXY has the potential to continue its upward trajectory, maintaining the trend that has been established over previous cycles within the chart. Remember to follow for more updates and insights as we keep an eye on the DXY's performance.
TVC:DXYLong
by Sober_Trading
EURUSD (A huge Earthquake is Coming) Hello my friends, how are you doing? I hope you will fulfil your ambitions ❤️❤️❤️ Today, I want to talk about EURUSD. What a chart! wow. Before that, I want to remember It's not financial advice. so, just see and think about it. I'm just sharing my view and opinion of the chart. Please do your own research. Don't waste time and Let's go into details 🌺🌺🌺 Based on the Elliot wave, we can count waves. each wave includes 5 microwaves and today I want to count the waves at EURUSD. That's all we do. there is a very very important point in this chart and I want to tell you that. Based on Elliot's theory, the second wave can retrace the first wave to a maximum of 0.618 Fibonacci. and if this retracement takes longer, we would expect to see an extended third wave. Exactly, in EURUSD we see this situation. Please check the first photo 👆👆👆 The second wave retraced the first one till 0.886 Fibonacci and it's so dangerous. so we expect to see an extended third wave. in this case, we see the third wave moved to 4.618 Fibonacci. and it sounds strange. it's happened. exactly such as I said. Please check all these photos. And the Fourth wave can retrace to a maximum of 0.618 Fibonacci of the 3rd wave and the last wave (the fifth wave) will begin. Now, it's time to calculate the last PRZ for the end of the fifth wave. I did it for you guys. And I expect the fifth wave to drop to 0.85-0.88. it means that the worth of EURUSD drops to a zone between 0.85-0.88 and if this happens, all markets will drop soon. please, for God's sake, watch the market. the situation is so complicated. don't forget to save your profit. SP500, BTC, NDX and so on will drop soon more than you think. ✔️ ✔️ it was my duty to warn you about this earthquake. I'm sure you are confused right now. But it's ok and there is no problem. Time Proves Everything. If you have any questions, or if you need to know more details please don't hesitate to contact me. 🙏🙏 Please don’t forget to like 👍, follow ✌️, and share 👌 this analysis with your friends. Thank you so much for your attention and participation 🙏🙏 Wish you the best 🧞♀️ Sincerely Yours 🙏🙏 Ho3ein.mnD
Short
by Sticky-Stock
2
Dollar Index (DXY): Your Trading Plan 💵 After a massive selloff, Dollar Index retraced to a key horizontal resistance. We can see that the market is currently consolidating within the underlined blue area. To short the market with a confirmation, let the price break the support of the range. 4H candle close below 102.37 will confirm the violation. A bearish continuation will be anticipated at least to 102.0 level then. Alternatively, a bullish breakout of the resistance of the range will extend the correctional movement at least to 102.86 ❤️Please, support my work with like, thank you!❤️
TVC:DXYShort
by VasilyTrader
1
DXY (Dollar Index) Shorts from 103.300 down towards 101.500My bias for the dollar this week remains bearish, leading me to seek pro-trend trades from any proximate valid supply zones. With the recent reaction from my prior 3-hour demand, I anticipate the price to continue its ascent to address the imbalances above. Subsequently, my expectation is for the price to undergo distribution within a supply zone identified on the 14-hour chart, providing opportunities for selling positions on the way down. While acknowledging the possibility that the price may not ascend as high and instead continues to drop, I am prepared to wait for a new demand zone to seize potential buy opportunities in such a scenario. Confluences for DXY Shorts are as follows: - Price broke structure to the downside on the HTF, confirming a bearish bias. - There's lots of liquidity left below in the form of trend line liquidity and asian lows. - There's a clean 14hr supply zone that has caused the impulsive move to the downside in which I expect price to react from next. - Since there are imbalances beneath the supply, it's probable that once the price addresses them, a bearish reaction will ensue from the supply. P.S. My bearish stance on the dollar persists, prompted by the recent structural break observed on the higher time frame (HTF). This strengthens my inclination toward bearish positions, making me more inclined towards considering long positions for pairs like GBPUSD and EURUSD. If you guys have another take on this market I would love for you guys to leave a comment!
CAPITALCOM:DXYShort
by Hassan_fx
3
US Dollar Faces Supports: Potential Double Bottom Signals MarketUS Dollar Faces Supports: Potential Double Bottom Signals Market Dynamics Major currency pairs continue their range-bound movement on Monday as investors refrain from making significant directional bets. The market sentiment is cautious due to escalating concerns, with investors eyeing key inflation data releases from both the United States (US) and the Eurozone later in the week. Early Monday, Asian markets saw declines, influenced by the People’s Bank of China's (PBOC) lack of detailed information on stimulus measures for private firms and rising respiratory illnesses in China. The ongoing decrease in China’s Industrial Profits, coupled with uncertainty surrounding major central banks' interest rate outlooks, further contributed to the subdued market mood. The return of US traders after the Thanksgiving holiday break is awaited, and the US S&P 500 futures, considered a risk barometer, indicate a 0.30% decline on the day. Despite the cautious market sentiment, the US Dollar experiences selling pressure as it hovers around the 103.200 zone. Notably, there's potential for a Double Bottom formation, suggesting a strong recovery for the USD. The existence of a Fair Value Gap (FVG) around $105.000 becomes noteworthy, serving as a potential target point in the event of a market reversal. Our Preference Above 102.600 look for further upside with 104.2150 & 105.000 as targets.
TVC:DXYLong
by FOREXN1
1