The course of trading on the foreign exchange markets at the beginning of the new trading week, which is marked in the 2023 calendar as the 43rd in a row, brought investors, traders and other financial market participants a drop in the exchange value of the US dollar (USD). According to economic correspondents in connection with analysts of brokerage companies and financial strategists of investment banks, the main reason for the drop in the USD is the increased nervousness in the market regarding the approaching date of the meeting of the central bank of the US Federal Reserve System (FED) regarding interest rates.
In contrast, participants in the cryptocurrency market saw a significant increase in the most widespread virtual currency Bitcoin (BTC), when currently the cryptocurrency BTC was traded on the digital currency market Coinbase during the European Tuesday morning on October 24, 2023, at approximately 6:04 CET on value of its exchange rate against the US dollar (USD) of USD 34,210.00 per BTC with BTC up +8.98% against the USD for the day to date. This mutual exchange rate was achieved in a situation where the exchange value of the USD measured by the dollar index DXY (US Dollar Currency Index) reached a point level of 105.49 USD points with a daily decrease of -0.04% of the point value according to this index, which compares the value of the USD to six other major world currencies. Thus, on the indicated day and time, the global currency pair of the single European currency Euro (EUR) and the US dollar (USD), as the world’s main commodity currency, was traded in the forex operations of the foreign exchange market at a rate of 1.068 USD per EUR with the previous daily strengthening EUR by + 0.11% of the exchange rate against the USD.
The US dollar (USD) found its market support last week, which is marked as the 42nd in the calendar for this year 2023, after the chairman of the Federal Reserve System, Mr. Jerome Powell, said that the economic strength of the US could require tighter financial conditions, pushing the benchmark 10-year US Treasury yield above 5% annual yield, the highest since July 2007. Subsequently, however, Bitcoin (BTC) returned the spotlight to the financial market as the most widely used virtual currency surged , following speculation that competent United States legislative bodies may soon approve a Bitcoin fund tradable on major US stock markets. Currently, however, the market’s attention is turning to some of the last snippets of US economic data ahead of the Federal Open Market Committee Federal Reserve System (FOMC) meeting, which will take place as early as next week, traditionally as a two-day meeting on 31 October to 1 November 2023 in Washington, DC.
Furthermore, participants in the financial markets are waiting for macroeconomic data from the United States, especially the purchasing managers’ index, or PMI, which will be published today, October 24, 2023, and later on Tuesday. Also, in order to assess their investment and business activities, financial market participants are waiting for the gross domestic product (GDP) data in the USA, which will be published on Thursday, October 26, 2023. The PMI data could set market expectations ahead of the GDP report, said Matt Simpson, chief market analyst at City Index. “If the data tilts far enough, it could trigger a strong rally in the dollar or a meltdown with the Fed in the offseason,” he said, referring to for the period before the political session, in which there are restrictions on public communication from representatives of the central bank. However, according to the latest signals, the Fed’s FOMC is expected to keep rates unchanged at its meeting next week. This very fact affected investor sentiment and the USD began to lose its top exchange position against other currencies and especially against the EUR. It is also expected that the European Central Bank (ECB–European Central Bank) will leave interest rates unchanged at its meeting on Thursday 26/10/2023, as it recently raised its key interest rates by 25 basis points in September of this year 2023.