Foreign currencies are on the verge of collapse

Key points

• USD/JPY is up over 1000 pips from July lows
• GBP/USD nears inflection point of 1.2000
• BoE reports slowing global economy - excluding the US

Correction: in the table shown from 4:38 to 6:07* - EUR low should be 0.8300 making distance 0.2280; CAD high should be 1.6200 making distance 0.2710; CHF high should be 1.0600 making distance 0.1470

Currencies face a slowing global economy

Last week's central bank meetings showed more countries are more concerned with economic growth than fighting inflation with tighter monetary policy. When the Bank of England decided to hold rates unchanged, they cited slowing GDP expected from the UK in Q3, as well as expected Q3 contraction in Euro-area GDP. These metrics differ from the US, whose GDP growth is forcasted to increase in Q3.

This divergence in economic conditions has manifested in forex markets as US dollar continues to gain against other major currencies. GBP/USD is down over 900 pips from July highs to trade below 1.2200.

Asian currencies are nearest to collapsing with US dollar currently up 1000 pips against the Japanese yen since mid July. Nearing 149.00, USD/JPY is less than 200 pips away from reaching a 30-year high.

How to trade US dollar

1. Open an account to get started, or practice on a demo account
2. Choose your forex trading platform
3. Open, monitor, and close positions on USD pairs

Trading forex requires an account with a forex provider like tastyfx. Many traders also watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.

You can help develop your forex trading strategies using resources like tastyfx’s YouTube channel. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.

Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.

*Historic extremes calculated using daily close prices rounded to the nearest 100 pips; current prices as of 9/25/23