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Forex Market Analysis: U.S. Dollar’s Pre-Fed Minutes Decline and Nvidia’s Q4 Earnings Surge

February 21, 2024
CURRENCIES:
  • Top of Form U.S. Dollar Performance Pre-Fed Minutes: The U.S. dollar experienced a slight decline due to subdued U.S. yields, with a lack of significant market drivers on Tuesday.
  • Anticipation for FOMC Minutes Release: Market volatility is expected to increase with the upcoming release of the FOMC minutes, which could shed light on the Fed’s inflation outlook and potential timing for rate cuts.
  • Fed’s Stance on Rate Cuts: Recent statements by Fed officials suggest a cautious approach to immediate rate cuts, which could lead to higher U.S. Treasury yields and strengthen the dollar.
  • Potential Market Reactions: If the FOMC minutes indicate a possibility of earlier easing, it may result in lower yields and a weaker dollar, whereas a confirmation of a delayed easing cycle could bolster the dollar.
  • Technical Analysis for USD Currency Pairs: The article will focus on the technical analysis of major USD pairs, including EUR/USD, GBP/USD, and USD/JPY, highlighting key price levels for traders.

STOCK MARKET:
  • Nvidia’s Q4 earnings are viewed as a crucial test for the AI sector, with expectations for a 234% surge in revenue.
  • The company’s stock has seen a remarkable 184% increase over the past year, outperforming rivals like AMD and Intel.
  • Despite a brief moment as the third-most valuable company globally, Nvidia was surpassed by Amazon and Alphabet as of the latest update.
  • For Q4, projections are set for Nvidia to report earnings of $4.60 per share on $20.4 billion in revenue, a significant jump from the previous year.
  • The Data Center segment, fueled by demand for AI, is anticipated to report $17.2 billion in revenue, a dramatic increase from the year before.
  • Meta plans to incorporate 350,000 Nvidia H100 chips into its AI data centers by end of 2024, indicating substantial revenue for Nvidia.
  • Gaming revenue is also expected to rise, from $1.8 billion to $2.7 billion.
  • Forward guidance from Nvidia will be closely watched for indications of sustained AI market strength.
  • Analysts have raised their price targets for Nvidia, reflecting optimistic expectations.
  • Nvidia faces competition from AMD and Intel in AI chips and challenges from companies developing their own AI chips, including Amazon and Google.
  • Nvidia is addressing the threat of customized AI chips by discussing potential collaborations with major tech firms.
  • U.S. export restrictions to China pose a challenge for Nvidia, but the company does not anticipate an immediate financial impact.

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