Forex News 24
  • RSS

news

The US Dollar is the market’s darling

The US Dollar is the market’s darling
админ
03/05/2018

images 3 - The US Dollar is the market’s darling

Currency Markets

The USD had a slight wobble on the Feds latest statement redraft which was interpreted dovish on the surface. But below lurked a confident sounding board suggesting inflation targets are on track. With no follow-up presser, additional Fedspeak and the release of the minutes on May 23 will provide more clarity into the boards thought process. But yes, given the robust US economic data, the balance of risk remains for the Fed to keep policy on track and if anything lean more aggressive.

With all the trade noise still simmering on the back burner, the Feds were unlikely to come out heavy-handed anyway as much can change on these delicate trade negotiations between now and June 13 FOMC.

But, with the US economic data flow continuing to dwarf other economies around the world and mainly the EU, the US Dollar remains the markets darling for the time being. As expected, the malefactor in the crowd was the EUR nosediving and pulling most of the G-10 currencies in tow as the common currency now sets sights on YTD low of 1.1915.

Equity markets

US equities hit the late skids afternoon despite a better than expected earnings report from Apple. But with much of the good news in the equity world currently factored, investors are left mulling over the paradoxical landscape of stellar earning but higher interest rates and the threat of trade war. This struggle is unlikely to end anytime soon.

Oil Markets

Prices wobbled when U.S. Energy Information Administration (EIA) reported a larger-than-expected 6.2-million-barrel build in crude stocks on lower exports and higher imports than a week ago. However,  Oil bulls found solace in the IMF’s threat to expel Venezuela which could all but collapse the Venezuelan oil industry if the IMF cuts funding due to inconsistent economic reporting.
But in general, the market has shifted to consolidation mode as we have amazingly entered a 48-hour lull in geopolitical tensions.

Gold markets 

Gold prices initially recovered post FOMC but have come under renewed pressure on a surging USD. The balance of short-term risk remains for a stronger dollar supported by robust US economic data. Given the lull in geopolitical tension, the fear for gold investors is that sell -stop mechanisms get triggered by a move below $1300.00 that could cause gold to cascade much lower. Longs are holding on by a thread at this stage.

Currency View

EUR: Continues to trade heavy as traders are now targeting 1.1915 years to date low. The Euro will continue to get the most attention into NFP.

JPY: Despite the rising political risk in Japan, USDJPY remains supported by easing of political threat in the Korean Peninsula along with higher US bond yields. The market is trading off USD dollar strength not a weaker JPY

MYR: The USD has remained on positive footing post FOMC and has offered no reprieve to the pre-election beleaguered Ringgit versus the USD. While the Ringgit is better positioned, due to higher oil prices, to withstand external shocks better than some regional peers, it too is feeling the pressure from waning global equity markets. Not only  is the MYR mired in election risk but it must now compete with the resurging Greenback

Source

Related ItemsApplebalancebondbullscurrencyDollareconomicEnergyequitiesEURFedgoldinflationinterest ratesJapanmarketmarketsOilpricesratesrisktradetrade wartradingUS

Leave a Reply

Cancel reply

Your email address will not be published. Required fields are marked *

Anti-spam: complete the taskWordPress CAPTCHA


news
03/05/2018
админ
Related ItemsApplebalancebondbullscurrencyDollareconomicEnergyequitiesEURFedgoldinflationinterest ratesJapanmarketmarketsOilpricesratesrisktradetrade wartradingUS

More in news

273116ff712463a8fe797bc26d4bddd2 400x240 - Major policy change for the FED

Major policy change for the FED

админ30/08/2020
Read More
5ecd652efa96beb5e9daab8a81713e20 400x240 - Powell expected to preview Fed’s policy framework

Powell expected to preview Fed’s policy framework

админ27/08/2020
Read More
1cfd53e4dc84605be8f34b32e1fc08ff 400x208 - European markets look defensive

European markets look defensive

админ26/08/2020
Read More
Scroll for more
Tap

Last news

  • 273116ff712463a8fe797bc26d4bddd2 95x60 - Major policy change for the FED
    Major policy change for the FED
    news30/08/2020
  • 5ecd652efa96beb5e9daab8a81713e20 95x60 - Powell expected to preview Fed’s policy framework
    Powell expected to preview Fed’s policy framework
    news27/08/2020
  • 1cfd53e4dc84605be8f34b32e1fc08ff 95x60 - European markets look defensive
    European markets look defensive
    news26/08/2020
  • cbda506728f805be55e3597fd478b623 95x60 - Another record-setting session for U.S. stocks futures
    Another record-setting session for U.S. stocks futures
    news25/08/2020
  • 3c51d052540d35f9b8497fc0b1942d58 95x60 - $50M worth of cryptos or more left China
    $50M worth of cryptos or more left China
    news23/08/2020

Tags

american Asia Bitcoin China cryptocurrency currency Dollar dollar index economic Economists EUR euro Fed Federal Reserve forex futures GBP GDP Germany Index inflation interest rate interest rates Japan losses lost market markets monetary policy Oil price prices rate rates retail rise risk sales trade trade war trading Trump UK United States US

Copyright © 2019 Forex News 24, all rights reserved.

Dollar slips from four-month high, awaits fresh catalysts after Fed
European Economics Preview: Eurozone Inflation Data Due