Scan to Download ios&Android APP

Forex news: Fed minutes fail to boost USD; RUB sinks on emergency cut

09:24, 26 May 2022

Share this article
In this article:
  • AUD/USD

    0.69186 USD
    -0.00255 -0.370%
  • USD/CAD

    1.28948 USD
    0.00019 +0.010%
  • USD/JPY

    134.652 USD
    -0.519 -0.380%

Have a confidential tip for our reporters?

US dollar and russian flag in the background
Is a USD/RUB trend reversal in the cards following another interest rate cut in Russia? – Photo: Getty Images

The Japanese yen (JPY) and the Swiss franc (CHF), two traditional safe haven currencies against the risks of global market turmoil, gained momentum following the release of the Federal Reserve minutes last night, while the US dollar index (DXY) retraced to the 102 level in European morning trade.

The Fed minutes failed to boost the USD, despite the board's unity in rising interest rates by another 50 basis points in the next "couple of meetings" and putting the cost of money into restrictive territory to battle pressing inflation. It might be a symptom that the market has already discounted a number of rate rises and is now anticipating the next phase, which might be a slowdown in the US economic momentum.

US dollar index (DXY) subdued after Fed minutes, as investors brace for a US slowdown

JPY and CHF gain as investors scale back Fed rate hikes

Fears that aggressive Federal Reserve rate rises would tip the US economy into recession are gaining momentum among market participants, driving the greenback lower and providing relief to other currencies that have been hit hard this year.

The Japanese yen (JPY) is the best performing currency today, gaining 0.5% versus the US dollar, and hitting the levels of mid-April.

The Swiss franc (CHF) was also in the green today, rising 0.2% against the USD, after having declined nearly 5% since the beginning of the year.

Major pairs: top risers and fallers today – 26 May 2022

A forex table that compares nine major currencies against each other, including USD, EUR, GBY, JPY, CHF, AUD, NZD, CAD and NOKMajor currencies: Today’s top risers and fallers, 26 May 2022, 11:00 UTC – Photo: Capital.com

Central Bank of Russia's emergency cut shakes the rouble (RUB)

The Russian central bank convened an emergency meeting this morning to announce a 300-basis-point rate cut to 11%, emphasising that high rates have a detrimental impact on the domestic economy.

It's a clear sign that the rouble's exceptional appreciation (+24% since the start of the year against the US dollar) is now a worrying element for Russia's economy, which is being ripped apart by inflation at a 20-year high (17.8% in April) and the departure of foreign corporations.

This emergency rate cut, if backed by additional capital controls easing in the coming weeks, might lead to a trend reversal in the USD/RUB pair, which has just touched four-year lows and extreme oversold levels in the past days.

What is your sentiment on AUD/USD?

0.69186
Bullish
or
Bearish
Vote to see Traders sentiment!

USD/RUB in deep oversold territory: a trend reversal in sight? 

a chart showing USD/RUB pair and Relative strength indexUSD/RUB and 14-day relative strength index – Photo: Capital.com / Source: Koyfin

Hungarian forint (EUR/HUF) tumbled as government seizes multinational profits

The Hungarian Prime Minister, Viktor Orbán, declared a state of emergency in Hungary yesterday in response to the conflict in Ukraine, granting the government expanded powers to improve family financial security.

Multinational corporations in industries ranging from energy to airlines will be required to contribute their excess profits to the struggling national budget.

The news was not warmly welcomed by the Hungarian forint (EUR/HUF), which fell 3% versus the euro, the most in over two months, to trade at 394 before retracing to 391.5 this morning. 

EUR/HUF: A bullish MACD crossover reinforces the positive trend

Forex market heatmap – 26 May 2022

A forex table showing the performance of US dollar and the euro against other currenciesForex market heatmap 25 May 2022, 11:00 UTC – Photo: Capital.com

Forex markets today – 26 May 2022

  • The US Dollar Index (DXY) eased by 0.1% to 102 by 11:00 UTC.  
  • The euro (EUR) rose to $1.07, up by 0.1% on the day after falling 0.5% yesterday. The British pound (GBP) gained 0.2% to $1.259.  
  • Among safe-haven and low-yielding currencies, the Japanese yen (JPY) and Swiss franc (CHF) rose 0.5% and 0.2% respectively.  
  • Oil-linked currencies, such as the Norwegian krone (NOK) and the Canadian dollar (CAD), edged slightly higher as WTI prices rose above $110 a barrel.  
  • High-beta majors, such as the Australian dollar (AUD) and New Zealand dollar (NZD), were relatively flat. The Swedish krona (SEK) fell 0.5% versus the EUR. 
  • In emerging markets, the Turkish lira (TRY) awaits today's interest rate decision. In Asia, the Chinese yuan (CNH) fell 0.6%, while the Korean won (KRW) gained 0.1%. High-beta EM currencies were mixed, with the Mexican peso (MXN) gaining 0.2% and the South African rand (ZAR) slipping 0.4%.

Read more...

Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?


Join the 400.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account

2. Make your first deposit

3. You’re all set. Start trading