The US dollar starts the week strong – BestForexEasy

Dollar advances at the opening of the week after Powell’s speech; GBP/USD hits two-year low; The yield on two-year US Treasuries is at a 15-year high; Bitcoin is below $20,000; Global stock markets decline

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Summary: Risk sentiment was hit hard by Powell’s hawkish speech at Jackson Hole last Friday, which led to strong outflows of risk into the US dollar.

• Fed Chairman Powell’s hawkish speech at Jackson Hole last Friday, in which he suggested that a prolonged period of interest rate hikes was needed to bring down the high inflation rates that would cause pain for the economy, triggered a renewed sell-off in the stock and other risky asset markets. To the very strong support of the US dollar, the US dollar index and the US 2-year Treasury yield are both trading at their highest levels in the long term, and the GBPUSD has dropped to a new 2-year low. There is a strong long-term bullish trend in the US dollar that looks likely to continue, and forex traders will probably do a good job of keeping that in mind today.
• Global stock markets are down almost everywhere. The S&P 500 and Nasdaq 100 are trading well below Friday’s close, and Japan’s Nikkei 225 index is down more than 2.5%.
• In the forex market, the US dollar is the strongest major currency, while the British pound and the New Zealand dollar are the weakest.
• Bitcoin is trading below $20K but has not made any break after the critical support level at $19,164.
• The Chinese yuan hit a two-year low earlier today.
• Today is a public holiday in the UK, so the British Pound may be trading thinly before the start of the New York session.
• The number of daily new cases of coronavirus worldwide fell last week for the sixth consecutive week.
• It is estimated that 67.6% of the world’s population has received at least one dose of the coronavirus vaccination, while 7.7% of the world’s population has been confirmed to have contracted the virus at some time, although the true number is likely to be much higher.
• The total number of confirmed new cases of coronavirus worldwide is over 606 million with an average case fatality rate of 1.07%.
• The rate of novel coronavirus infections now appears to be increasing significantly in Haiti, Japan, South Korea and Russia.