The US dollar seemed to totter slightly against the top six currencies recently, with its lowest rate since March this year at 96.093. This comes as the Federal Reserve indicates a potential rate cut as early as next month. While this is met with mixed emotions on the trading front, traders will need to pull out all their stops to ensure they make the most of these fluctuations. One of the best ways to successfully navigate through world events and currency shifts is by adapting their strategies.
Weathering The Trade Wars With China
One of the biggest events affecting the USD at the moment is the ongoing trade war with China. A forex strategy that takes this into consideration will be able to weather the outcome of these trade wars to the benefit of the trader – for instance, knowing when to hold on to certain currency pairs and when to let go of them. Should the US presidency derail plans of an agreement with China, the USD risks losing ground to other major currency pairs. For traders, this presents other opportunities as they focus on other currency pairs or employ trading strategies off the beaten track.
The Euro Sneaking Through The Gaps Of Technology
While the rest of the world focus on China and the US ahead of the G20, the EUR slowly gains ground as talks with Britain seem to come to a close amidst the Brexit storm. For USD traders, it’s important to not lose sight of developments that have an indirect effect on the dollar, such as other currencies gaining ground. It’s also important to realize that the pond is getting a little crowded as traders find it easier to sign up for FX accounts, which can make the fluctuations a little harder to predict. Trading accounts that promise fast access to forex and FX brokers with welcome bonuses ensure that more people across the globe have instant access to forex trading. For traders, it’s becoming increasingly easy to make trading decisions and moves at the drop of a hat, thanks to technological advancements in FX trading.
The Yen Is Not Always A USD Safehaven
Traders have been known to seek solace in the yen when trading on the USD front becomes a little steep. However, this trading strategy seems to have teetered out. Instead, traders are seeing a stronger yen as the tension between the US and Iran increases. For traders, this is a slightly skewed view of what they’re used to when trading, which means a backup strategy should always be on-hand when the markets don’t quite go the way traders are used to. This means focusing on other currency pairs, or perhaps pitting resources against certain currencies to make some profit off the troughs.
While the USD still remains one of the most stable currencies to trade with, traders will need to know where to place their stops and when to change strategy if needed. World events are certainly making their mark on the currency, and for traders to be successful, careful anticipation of these events is essential.