The US dollar index (DXY) rose to a 20-year high of 105.29 on Wednesday, as investors continued to worry about rising inflation and interest rates. The euro fell to a 20-year low of $1.0236, as the European Central Bank (ECB) is expected to raise interest rates more slowly than the Federal Reserve. The British pound fell to a two-year low of $1.1960, as the UK economy is expected to slow down in the coming months. The Japanese yen fell to a 20-year low of ¥135.53 per dollar, as the Bank of Japan (BOJ) continues to keep interest rates low. The Australian dollar fell to a six-week low of $0.6821, as concerns about the global economy weighed on risk appetite. The New Zealand dollar fell to a six-week low of $0.6215, for the same reason.
Bitcoin (BTC) fell to a low of $23,800 on Wednesday, its lowest level since December 2020. Ethereum (ETH) fell to a low of $1,190, its lowest level since January 2022. Other major cryptocurrencies also fell sharply, with Dogecoin (DOGE) falling to a low of $0.05 and Shiba Inu (SHIB) falling to a low of $0.000008. Bitcoin, long seen as a form of digital gold that could serve to mask market turmoil, also fell below $30,000 repeatedly in a week, less than half of where it was near the $69,000 top in late 2021.
The forex market is expected to remain volatile in the coming weeks, as investors continue to worry about the global economy. The crypto market is also expected to remain under pressure, as investors continue to sell off risky assets.
Traders should be careful when trading the forex and crypto markets in the current environment. They should use stop-losses to limit their losses and should only trade with money that they can afford to lose.