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April 2024: Key Currency Movements & Economic Shifts

Quick Look:

  • EUR/USD fell below 1.0635, setting new lows since last November;
  • USD/JPY reached its highest level since 1990, showing strong dollar demand;
  • GBP/USD is under pressure, possibly dropping to 1.2325;
  • Fed’s rate hikes total 525 basis points since March 2022;
  • U.S. federal debt is projected to reach $40 trillion by the end of 2025.

The financial landscape of April 2024 is marked by significant shifts in currency valuations and central bank policies, shedding light on the ongoing economic adjustments and potential future directions.

EUR/USD Drops Below 1.0635, Down 2.4% Since April

The EUR/USD currency pair faced a notable decline early in the month, breaking the crucial support level of 1.0635 to reach lows not seen since the previous November. This downturn reflects a 2.4% loss from the month’s swing high. If the pair regains strength above the 1.0635 level, upcoming resistance is anticipated at 1.0700 and 1.0725, with the SMA levels potentially guiding further movements.

USD/JPY Peaks: Highest Since 1990 at 155.80

The USD/JPY exchange rate demonstrated strong bullish momentum, reaching heights last witnessed in June 1990. This surge signals robust investor confidence in the dollar, with the potential to challenge the channel resistance at 155.80. Should the upward trend wane, the support levels to watch include 153.20, 152.00, and 150.80, with the 50-day SMA providing a safety net at 150.50.

GBP/USD Nears October Low, Testing 1.2040

In contrast, the GBP/USD pair has gradually declined, currently hovering around a support level 1.2435. A breach below this point could lead the currency to test the October low of 1.2040. Resistance lies at 1.2525, and key SMA intersections at 1.2580 and 1.2650, potentially capping rebound attempts.

Fed’s Tightening Slashes $1.5 Trillion from Assets

The Federal Reserve’s monetary policies have significantly influenced the economic landscape, notably through the shift from quantitative easing to tightening. This strategic pivot has reduced asset value from a peak of $8.965 trillion to $7.439 trillion, underscoring the Fed’s ongoing commitment to stabilising the economy.

US Debt Could Hit $40 Trillion by 2025, Deficit at $1.4T

The United States faces daunting fiscal challenges, with the federal debt expected to surge to $40 trillion by 2025. The budget deficit in 2024 is projected at $1.4 trillion, with interest expenses also reaching considerable heights. These financial indicators are critical as they substantially shape policy decisions and economic strategies moving forward.

Gold Reserves Dip to 1,037.4 Tonnes, Worth $900B

Central banks’ management of gold reserves continues to reflect a proactive approach to economic stability. The total gold reserves decreased to 1,037.4 tonnes in 2023, valued at approximately $900 billion. This adjustment in reserves highlights the ongoing global economic realignments and the strategic role of gold in monetary policy frameworks.

This comprehensive overview provides insights into the key movements and trends affecting the global financial markets and economies, offering a basis for understanding and anticipating future developments.

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