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Dollar Continues Slide as Markets Head into 4th Quarter

Published on: 10/5/18 11:30 AM

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Category: Currency, Forex, Latest News, Market, Trade, Trading, US News, World News

Heading into the end of the third quarter of 2018, investors continue to watch the US Dollar (USD)



Value of the dollar held strong


The value of the dollar held strong coming into the third quarter but started its current downward trend over the last six weeks. With the USD holding onto its bearish course, it remains to be seen if the currency will stay on this trajectory and land itself back down to the key levels of 92 not seen in a few years. Economic analysts will have their eyes set on Wednesday’s Federal Reserve meeting, as the Fed is expected to raise interest rates. Despite the anticipated rate hike and another suspected for December, the dollar still remains weak as it continues its six-week slide.

  The dollar started strong at the beginning of the third quarter and investors were slightly surprised when it began its slide. Many experts believed that the USD could possibly regain its prior losses as both the Euro (EUR) and the British Pound (GBP) began a sell-off. The current political scene in Italy and Turkey combined with the ongoing Brexit fears have left both of these European currencies in a precarious state. However, the strong reversal of the USD as the third quarter soldiered on proved that the weakness and uncertainty in Europe were not enough to sustain the strength of the USD. All eyes will be on the USD as the Greenback enters a precarious situation heading into the last quarter of the year.

UK and the USD


The bullish trend of the EUR/USD continues to hold and the GBP/USD is beginning its recovery this week following last week’s sell-off. Continuing headlines regarding Brexit have contributed to the uncertainty between that pair. This is likely to continue throughout the rest of the year because it is still unclear how the UK will negotiate the terms of Brexit with the EU. This volatility in the markets in the UK will continue to affect the USD for months to come.

The overall weakness of the Japanese Yen (JPY) comes as a surprise to many as the USD grapples with its own struggles. USD/JPY is still holding at its current two-year high, indicating that the JPY weakness is greater than that of the USD. In related news, the EUR/JPY continues to show strength and even a potential to hit a bullish streak. GBP/JPY is also expected to continue its topside strategies in an effort to capitalize on the weakness of the JPY.