Dollar dominance

16 November, 2016

There was a sense of stabilisation yesterday after the sharp rise in bond yields seen at the end of last week, the impact of which spilled over into the FX and also equity markets. It’s notable that trading ranges have remained wider since the US election last week, more notable in EURUSD and USDJPY, less so on sterling which has outperformed the dollar for the most part over the past week. But the narrative on the dollar is strong, having closed above the 100 level of the past couple of days, that’s more than a 5% increase over the past six weeks. A move higher in interest rates next month is now a near dead-cert, with the implied path for rates next year also moving higher, providing further support for the dollar.

Overall, it’s still proving hard to pull away from Trump presidency speculation, which continues to drive many asset classes and sectors, especially financials, technology and pharmaceuticals in the US. The data calendar today see labour market data in the UK, but this won’t impact the same way that the US jobs numbers impact the dollar. Sterling has continued to hold up well in the post-US election environment. For now, it’s difficult to see the strong dollar environment receding, at least until the narrative on the dollar changes, which looks unlikely for now.


Source link  
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...


Can Supreme Court Ruling Help GBP?

Tomorrow, Tuesday 24 January, around 09:30 GMT, the UK Supreme Court will release...

Cautious EURUSD Ahead of ECB

USD, and the US government bond yields, surged last night following Fed president Janet Yellen’s speech to the Commonwealth Club in San Francisco...

The Fed waiting game

Ranges were on the tight side during Monday as markets hold back ahead of the two-day Fed meeting in the US which starts today. This is the last major known risk event of the year, so once over, we’re likely to see volatility and volumes diminish into year end...


Tapering and extending

The main challenge for markets today will be steering through the messages that emerge from the ECB meeting and press conference. Whereas the Fed meeting next week is seen as a near certainty in terms of its outcome, this is not the same for the ECB...

Crisis Lite

The Italian referendum on constitutional reform saw voters reject the proposals in front of them, in a fairly decisive manner. As such, Italian PM Renzi will tender his resignation today and this became part of the issue...

Can OPEC Meeting Help WTI Break Major Resistance

OPEC will hold the next meeting in Vienna on 30th Nov, discussing about further details regarding output freeze. Due to the market expectations on the likely agreement after the meeting, oil price has rebounded since 14th Nov, after testing the long term significant support line at 43.00...

  


Share: