At the beginning of the new trading week, the US dollar holds around two-week highs against major competitors in anticipation of an important meeting of the US Federal Reserve, which, as many expect, will lay the foundation for future interest rate cuts and maintaining the world's largest economy.

While strong data on US retail sales last Friday reduced the already low chances of a weakening of the US regulator’s policy this week and raised the dollar, investors are betting that Fed Chairman Jerome Powell will leave the door open for future declines rates in the light of growing economic tensions.
The dollar index versus the basket of six major currencies remained virtually unchanged - at 97.479 after rising to 97.583 on Friday, its highest level since June 3.

Forex platform > 

Expectations of interest rate cuts at the Fed meeting on June 18-19 fell from 28.3% on Thursday to 21.7% after strong retail sales data on Friday, according to FedWatch CME Group data. Nevertheless, the likelihood of monetary easing at the July meeting remains quite high - at 85%.

The American regulator is experiencing a kind of temptation to lower rates against the background of similar actions by national banks in other countries. For example, the European Central Bank recently raised the prospect of even greater stimulus, and the Bank of Japan is expected to strengthen its commitment to the current mass stimulus program for some time.

Concerns about a protracted standoff between China and the United States could lead to an even greater recession in the global economy, which led to lower interest rates in many Asian countries, including India, the Philippines, Malaysia, New Zealand, and Australia.

Metatrader 4 brokers - why PaxForex? 

In addition to optimistic data on the US economy, the dollar is supported by the weakness of other currencies, especially the euro. The Fed may sooner or later lower rates, but the ECB can do the same, which will allow the US currency to maintain its advantage.

The euro exchange rate slightly changed on Monday, settling at the moment at the level of 1.1214 dollars, after falling by about 0.6% on Friday, when the “European” fell to an eight-day minimum of 1.1203 dollars.

The Australian dollar rose by 0.2% to 0.6884 USD but remains within reach of a five-month low of 0.6862, set on Friday, when the currency fell by almost 0.7%.

The New Zealand dollar, which lost more than 1% during the previous session, trades at around a three-week low of $ 0.6488 reached by the end of last week.

The USDJPY remained stable, at 108.60 after rising by 0.15% on Friday.

How to trade on Forex? 

Forex trading recommendations:

EURUSD: Sell. Entry point – 1, 1213. Take Profit – 1, 1194. Stop Loss – 1, 1246.

NZDUSD: Buy. Entry point – 0, 6505. Take Profit – 0, 6519. Stop Loss – 0, 6482.

EURJPY: Buy. Entry point – 121, 84. Take Profit – 122, 01. Stop Loss – 121, 55.