The dominating dollar

11 October, 2016

There is little standing in the way of the US dollar at this point in time. If we look at the past seven sessions on the dollar index, where we’ve seen a 1.7% increase, there have only been three other brief prior periods during the year when we’ve seen a similar pace of appreciation. Several factors are at play here, not least the building expectation of a December rate hike from the Fed, together with the latest polling following the weekend TV debate in the US, which has put Clinton more firmly ahead. Short-term at least, a Clinton presidency removes the uncertainty that would prevail on a transition to Trump, so for the moment at least, markets are taking this well. Furthermore, as I pointed out last week, the US 2Y treasury yields has further to increase if we are to more confidently price a December tightening, over and above the 1.00% level and the past week has seen further travel to that direction (currently 0.86%).

Elsewhere, the latest push higher on oil prices has seen the Canadian dollar push further ahead, with the Brazilian real not that far behind. Brent pulled back from just below the USD 54 level yesterday, but the recent uptrend remains intact, providing ongoing support to commodity currencies. Russia and Saudi have made a joint pledge to limit production, which is also providing support. At the other end of the scale, sterling continues to move lower, both against the dollar and also the single currency. There are no major releases on the calendar today likely to upset this underlying tone, both to the dollar and sterling, but the latter especially does remain vulnerable to some correction higher given the level of short positions built up over recent weeks.


Source link  
Will US Q1 GDP Growth Show a Slowdown

This will be the first US GDP figure reported after Trump took office...

USD Rallies

Last Friday US non-farm payrolls for March rose by only 98K, which was far below expectations of 180K, marking...

How Will FOMC Minutes Affect USD?

The dollar index hit a 3-week high of 100.59 yesterday. However, it pulled back after testing the near-term major resistance...


EUR/GBP Bulls Retreat Under Resistance

The European Central Bank president Draghi will make a speech at 15:30 BST today...

Second Scottish Referendum Hits GBP

Tuesday evening, March 28, the Scottish parliament has voted by 69 to 59, in favour of holding a second independence...

Brexit Flight: A Hard or Soft Landing?

UK Prime Minister Theresa May will trigger Article 50 of the Lisbon treaty on Wednesday March 29, starting the 2-year Brexit negotiation...


Dollar Tumbles on Trump Uncertainty

USD plunged on Tuesday breaking the significant support line at 100.00 and further testing the next major support at 99.50...

Can Gold Hold Above Near Term Major Support?

Spot gold hit the lowest level of 1194.91 since 31st Jan on 10th, and rebounded as the zone between 1195 – 1197 is the near term major support zone...

Will Yellen Give a More Hawkish Outlook ?

The Fed will announce its interest rate decision and monetary policies, at 18:00 GMT today. Later, the FOMC press conference will be held at 18:30 GMT...

  


Share: