+176,529 USD Profit: Accelerated Dollar Selling on US Rate Cut Expectations? Focus on CPI to Determine the Next Move!

From August 5th to 9th, I managed to secure a total profit of +176,529 USD. It was another volatile week, but I’m particularly satisfied with having successfully capitalized on Bitcoin's rebound, resulting in substantial gains.

US Rate Cut Expectations and Future Outlook

Expectations for a rate cut in the US are growing, with the Federal Open Market Committee (FOMC) expected to begin cutting rates in September. The weakness in the US employment data for July, released on the 2nd, has heightened the outlook for a 0.5% rate cut instead of the previously anticipated 0.25%.

Currently, the US policy rate is at a high level of 5.25-5.50%, but with inflation slowing, expectations for a rate cut are increasing. Depending on the results of the US CPI, the market might further price in a 0.5% rate cut, leading to accelerated dollar selling.

Vice Governor Uchida’s Comments and USD/JPY Movements

In Japan, Bank of Japan Vice Governor Uchida stated that "interest rates will not be raised in an unstable market," indicating a continuation of the current monetary easing. This led to a rebound in Japanese stocks and USD/JPY, but the upside for USD/JPY remains limited, and a bearish outlook continues.

Key Points for Each Currency

• US Dollar (USD): Neutral to Sell
  • Due to the divergence in monetary policies between Japan and the US, USD/JPY is expected to remain heavy on the upside.
• Japanese Yen (JPY): Neutral to Buy
  • With the BOJ's rate hike decision and hawkish comments, there is a higher likelihood of yen appreciation.
• Euro (EUR): Neutral
  • While EUR/USD is expected to remain firm due to US rate cut expectations, the upside appears limited.
• Australian Dollar (AUD): Neutral to Buy
  • The Reserve Bank of Australia's monetary policy is in focus, with potential buying against the US dollar and selling against the yen.
• New Zealand Dollar (NZD): Neutral to Sell
  • With upcoming employment data and monetary policy announcements, the NZD is expected to remain weak.
• South African Rand (ZAR): Neutral to Sell
  • With the South African Reserve Bank's (SARB) September rate cut already priced in, the rand is expected to struggle, particularly against the yen.
• British Pound (GBP): Neutral to Sell
  • The uncertainty around the Bank of England's rate cuts is expected to result in unstable movements for the pound.
• Canadian Dollar (CAD): Neutral to Sell
  • The outlook for lower interest rates is likely to weigh on the Canadian dollar.

Conclusion

Currently, there is a severe outbreak of monkeypox (mpox) in Africa. In the Democratic Republic of the Congo, over 14,000 cases have been confirmed, and the infection has spread to neighboring countries such as Burundi, Kenya, Rwanda, and Uganda. With inadequate disease surveillance and vaccine stockpiles, international support is essential. The World Health Organization (WHO) has also classified this situation as a Public Health Emergency of International Concern and plans to convene an emergency committee.

Personal Measures Against Monkeypox

• Travel Precautions: Avoid traveling to regions where monkeypox is prevalent as much as possible.
• Infection Prevention: If staying in areas where infection is suspected, avoid contact with animals (especially primates and rodents) and refrain from consuming high-risk foods.
• Hygiene Measures: Practice thorough handwashing, use alcohol-based sanitizers, wear masks, and avoid crowded places.
• Health Monitoring: After returning from infected areas, monitor your health closely, and seek immediate medical attention if symptoms like rashes or fever appear.

As the monkeypox outbreak could potentially develop into a global emergency similar to COVID-19, it is essential to monitor both health measures and market impacts. Let’s continue to manage risks carefully while keeping an eye on the infection situation and international responses.

Stay healthy, and have a great weekend.