FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%
EUR/USD
1.1726
BTC/USD
48 251.96
GBP/USD
1.3741
USD/JPY
109.9290
USD/CHF
0.9322
USD/CAD
1.2769
EUR/JPY
128.9017

The melting of the dollar reversed by top US economic officials


23 September 2020

The two US economic policymakers, the Fed Governor and Treasury Secretary are supporting interest in US assets, strengthening both the dollar and the equity market yesterday.

Mnuchin and Powell noted during the Congressional hearing that the US economy is recovering better than expected, but still needs support. In particular, they talk about the need for more help for small business, but the discussion lacks details.

Separately, Evans, a voting member of the FOMC next year, made relatively hawkish comments. He noted that the Fed could start raising rates before the inflation averages 2%. These words have somewhat dampened medium-term inflation expectations and benefited the dollar.

The Fed’s mix of hopes for new stimulus and a less relaxed approach than expected has returned investor interest in US assets. Moreover, it happened at a critical moment. The dollar index emerged from the depths, where it consolidated from the end of July.

The dollar index strengthened above the 50-day average, and EURUSD dropped below this line. In the morning the single currency was down to 1.1675 dollars, the lowest level in eight weeks, thus confirming the break-up of the upward trend that took place in May. The short squeeze further amplified the more of the dollar.

The development of a corrective rollback on the dollar may take EURUSD relatively quickly to 1.1640. If the dollar bulls do not retreat here, the euro could test the area 1.1500 before the end of October. Apart from the fact that this is a psychologically important round level, there is a 61.8% correction area from the March-September upward move and the peak in March.

However, it is interesting to note that the steady growth of the dollar is weakly combined with a steady rise in the US stock indices. This, in turn, entices investors from stocks and commodities in favour of bonds whose real yields are increasing.

Although periods of simultaneous growth of the dollar and securities are not uncommon recently, they are never sustainable. Based on the fact that the dollar has stopped not only its decline but also confirmed the reversal signal for growth, stocks may not perform smoothly in the coming days.

Additionally, we should not forget that the major US indices remain below their 50-day average, sending a short-term bearish signal despite the rebound in the last 24 hours.

#source

Related

US Retail sales and other data has supported Dollar
US Retail sales and other data has supported Dollar

The US Retail sales notably exceeded expectations, adding 0.7% in August vs an expected 0.7% decline. The increase to August last year is an impressive 14.9%...

17 Sep 2021

Geopolitics Fire Up Up and Cryptos Are Booming
Geopolitics Fire Up Up and Cryptos Are Booming

Futures in the United States and Europe are trading lower today as investors are worried about the new security agreement between the U.S., the U.K. and Australia...

16 Sep 2021

UK inflation surges, stocks struggle
UK inflation surges, stocks struggle

European markets flat at the open this morning as UK inflation surged to a record high in August and Chinese economic data was soft. China’s retail sales fell to...

15 Sep 2021

Gold is anxiously waiting for the US inflation data
Gold is anxiously waiting for the US inflation data

Gold, hovering around $1790 since last Thursday, might take an even harder hit. The bears are waiting for a good signal to launch an attack. It is now holding it below significant levels...

14 Sep 2021

Here Is Why Stock Futures Are Trading Lower
Here Is Why Stock Futures Are Trading Lower

Despite a week of doom and gloom in the stock markets, futures in the United States are still trading lower. Since February, the S&P 500 has been on its longest...

13 Sep 2021

Fintech - too big to be?
Fintech - too big to be?

Two of the world’s largest economies are in sync with pressure on their fintech giants. Access to user data and the growth of ecosystems have effectively...

13 Sep 2021


Editors' Picks

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.