Three Things Dominating Forex Markets

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Three Things Dominating Forex Markets

　　First of all, will technology stocks continue correcting？ The Nasdaq composite has remained in correction since hitting a record high on September 2. As of September 11, the index has retraced by over 10% from its highs. The reason for the sustained decline is rumored to be Masayoshi Son, the richest person in Japan, whos position was squeezed after trading options. Whether or not the statement is right, it is normal for Nasdaq to see correction when accumulating large gains. Therefore, the correction is expected to continue until finding its initial support at 10,180. In this case, the U.S. dollar index may keep climbing this week.To get more news about WikiFX, you can visit wikifx official website.

　　Secondly, the British Parliament conducted the second reading debate on Johnson's Internal Market Bill on September 14. The bill may put the UK in the risk of no-deal Brexit, spurring more selling of the pound. I hold a pessimistic view that the UK is probably to stage a hard Brexit. This is mainly because the country's breach of the agreement, through which it hopes to force the EU to make concessions, will instead push the EU to fight every inch of the way. As the EU has declared it would accuse the UK of violating international law, the two parties can hardly reach a consensus in the face of such differences and trends. The dilemma is difficult to resolve unless Conservative MPs of the British Parliament dramatically change their sides, thus the pound is almost certain to see a deep loss.

　　The third thing is the leadership election of the Liberal Democratic Party of Japan on September 14. Unless something unexpected happens, Yoshihide Suga is set to win the election and the Abenomics policy will be maintained, not surprisingly, as he repeatedly stressed. One key unknown is whether Suga will call a snap general election soon after taking office, which will thrust the country on a knife-edge, hampering Japanese stocks. In this case, the Japanese yen has a chance to grow along with the good news that the US stocks seem to perform enduring consolidation. Eyes should also turn to the rate decision of the Bank of Japan on September 17, so as to see whether the Bank will greet the new prime minister with further quantitative easing, which is possible but not probable from my point of view.