Business Daily Media

Men's Weekly

.

‘It is the U.S. vs the rest’. Global broker's Octa view on U.S. exceptionalism

KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 22 January 2025 - The U.S. dollar has been appreciating almost relentlessly since the end of September. In just three and a half months, the Dollar Index (DXY), which measures the value of the greenback relative to a basket of six major foreign currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, was up more than 10% (from 27 September low to 13 January high).

On 13 January, it breached the critical 110.00 level and although it has since declined slightly, it remains by far the best-performing currency among other major currencies this year so far.

Octa

‘The reasons for such an impressive rally are plentiful and diverse, but generally it all boils down to the widening interest rate differentials between the United States and other major economies’, says Kar Yong Ang, a financial market analyst at Octa Broker. Indeed, the Federal Reserve (Fed), the U.S. central bank, currently maintains its benchmark interest rate in the range of 4.25-4.50%, which is the second highest level among eight industrialized economies. Most importantly, however, unlike most other central banks, the Fed is not expected to cut the rates aggressively in 2025 as the U.S. economy continues to demonstrate striking resilience, marked by robust labour market data and strong consumer spending. In addition, geopolitical uncertainty and the risk of trade wars have fuelled safe-haven demand for the U.S. dollar. In fact, the election of Donald Trump as the next U.S. president largely served as a catalyst for the recent rally in the U.S. dollar.

‘It was always assumed that Donald Trump’s victory in the presidential race would be bullish for the U.S. dollar as his trade and immigration policies were viewed as inflationary. Therefore, the market started to price in that outcome well in advance and the dollar began its ascent one month before the election’, says Kar Yong Ang, a financial market analyst at Octa Broker. Specifically, Trump has explicitly threatened to impose trade tariffs on Eurozone and Canada, which clearly had a bearish impact on their currencies. For example, the Euro, which has a dominant 58% weight in the DXY, has lost more than 8% against the U.S. dollar since 25 September 2024. The biggest losers, however, have been risk-sensitive currencies such as the Australian dollar (AUD) and the New Zealand dollar (NZD) (see the chart below) both of which devalued by more than 10%.

Major Currencies Performance Since October 2024
Source: Octa Broker calculations
Source: Octa Broker calculations

To put it simply, the U.S. dollar is rising because of fear that Trump's policies might spur inflation at best and trigger an all-out trade war at worst. In addition, the U.S. economy is outperforming most of its peers so the Fed is highly likely to ease its monetary policy at a much slower pace compared to other countries. Indeed, a recent Bloomberg survey forecasts a modest 1% growth for the Euro Area this year, slightly better than the 0.8% projected for 2024 but well below the long-term average of 1.4%. It is no surprise that the market continues to expect three or four 25-basis point rate cuts by the European Central Bank (ECB) in 2025 compared with just one or two by the Fed over the same period. In these circumstances, it is hard to expect EURUSD to rebound substantially from its recent lows. ‘I think there is more than a 50% chance that EURUSD will decline towards parity at some point this year and may even temporarily drop below the 1.0000 mark’, comments Kar Yong Ang, adding that Eurozone faces a number of structural challenges ranging from high energy costs and deindustrialization to geopolitical tensions and fiscal instability.

As for the DXY, its rally has started to show some signs of exhaustion lately. Technically, there is a bearish divergence between the DXY price and the Relative Strength Index (RSI). Furthermore, fundamentally, a lot of bullish factors have been already priced in and bulls lack new impulses for the next move higher. ‘I think the market has overly priced in all the dollar-related positives and the greenback actually looks slightly overvalued at this point. I think betting on its continuing appreciation is risky’, says Kar Yong Ang. Indeed, in some respect, the market has factored in a less likely scenario—i.e., that Donald Trump will impose blanket tariffs and destabilize global trade. While such a scenario is certainly possible its probability is relatively low. For example, Bloomberg reported that the U.S. could take a measured approach towards tariffs. ‘The market is forward-looking. Just like it started to price in Trump's victory well before the elections, so it may now begin to price out the underlying bullish expectations and anticipate a downturn in a classical “buy the rumour sell the news” fashion’, concludes Kar Yong Ang, a financial market analyst at Octa Broker.
Hashtag: #Octa

The issuer is solely responsible for the content of this announcement.

Octa

is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

In the APAC region, Octa received the 'Best Trading Platform Malaysia 2024' and the 'Most Reliable Broker Asia 2023' awards from Brands and Business Magazine and International Global Forex Awards, respectively.

News from Asia

Highbrow Unveils Its New Beauty Salon at The Adelphi

SINGAPORE - Media OutReach Newswire - 27 June 2025 - HighBrow, one of Singapore’s most trusted names in brow, lash, and nail care, is thrilled to announce the launch of its new beauty salon at The...

Cyberport 5 as Hong Kong's New I&T Landmark

Driving Emerging Strategic Industries Development Heralding a New Chapter in Integration of I&T and the Community HONG KONG SAR - Media OutReach Newswire - 27 June 2025 - The Cyberport ...

VinFast signs dealer financing cooperation agreement with BCA

JAKARTA, INDONESIA - Media OutReach Newswire - 27 June 2025 - VinFast has officially entered into a pivotal financial partnership with PT Bank Central Asia Tbk. (BCA), one of Indonesia's leading p...

Food Expo PRO and Hong Kong International Tea Fair Return in August with New Coffee Zone and Expanded Halal Sector

HONG KONG SAR - Media OutReach Newswire - 27 June 2025 - Organised by the Hong Kong Trade Development Council (HKTDC), the Food Expo PRO and Hong Kong International Tea Fair will be staged concurr...

Food Expo PRO and Hong Kong International Tea Fair: One-Stop F&B Platform Returns in August

Spotlighting Food Science & Tech HONG KONG SAR - Media OutReach Newswire - 27 June 2025 - Organised by the Hong Kong Trade Development Council (HKTDC), the Food Expo PRO and Hong Kong Internat...

The best CFD broker 2025': Octa receives yet another award

KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 27 June 2025 - Octa, a globally regulated and trusted broker since 2011, was recently named 'The best CFD broker 2025' by the AllForexRating.com...

DHL Express completes the modernization of its Air Hong Kong-operated fleet to boost Asia Pacific network capacity and fuel efficiency

14 A330 freighters in total have been added to the regional network, retiring the previous A300-600F fleet This is part of DHL Express's ongoing investment to enhance its network ...

Rethinking Obesity: Novo Nordisk’s Latest Initiative Urges Singaporeans to Treat, Not Blame

“Beyond the Scale” focuses on obesity as a chronic disease — urging empathy, early intervention, and evidence-based care. SINGAPORE - Media OutReach Newswire - 27 June 2025 - Imagine a chronic dis...

Trend Micro to Deliver AI Factory with Dell and NVIDIA for Secure Infrastructure at Scale

Platforms to accelerate secure AI adoption for modern IT environments HONG KONG SAR - Media OutReach Newswire - 27 June 2025 - Trend Micro Incorporated (TYO: 4704; TSE: 4704), a global cybersecur...

HKICPA renews its Mutual Recognition Agreement with ACCA

HONG KONG SAR - Media OutReach Newswire - 27 June 2025 - The Hong Kong Institute of Certified Public Accountants (HKICPA) is delighted to announce its renewal of Mutual Recognition Agreement (MRA)...

Demand for Home Batteries surges as Federal Rebate Kicks In

A leading provider of energy solutions VoltX Energy has seen a 400% increase in demand for home batteries in the past three weeks as people put d...

Why Sport Remains the Safest Bet in an Uncertain World

When Rome was in crisis, its leaders did not retreat to the Senate. They went to the circus. To the chariot races. To the gladiators. Sport was no...

THE FINE LINE WITHIN HILARIOUS SIGNAGE DESIGN FAILS

It seems like design failures still occur in today’s modern branding era, despite rigorous rounds of approvals behind the scenes. One signage show...

Deputy Announces Exclusive Global Partnership with Predelo to Bring AI to Shift-Based Businesses

Deputy, the global people platform for shift-based businesses, has announced an exclusive partnership with Predelo, an AI Decision Agent-as-a-Serv...

Leftover Budget? The Last-Minute EOFY Tip to Drive Business Success in FY25/26

The countdown is on. With just days left until EOFY, now’s the time to make your remaining 2024–2025 budget work harder and smarter. After workin...

pay.com.au appoints new CEO and Managing Director

The former COO will lead the company’s next growth phase, with ex-CEO Edward Alder transitioning into the role of Managing Director AUSTRALIA, 25...

Sell by LayBy