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
1.1728
BTC/USD
42 567.79
GBP/USD
1.3640
USD/JPY
109.4710
USD/CHF
0.9230
USD/CAD
1.2802
EUR/JPY
128.3820

Rising tide lifts (almost) all boats


24 June 2020

As we take stock of what has transpired in global markets this quarter, risk sentiment has certainly made a remarkable comeback despite the coronavirus pandemic having yet to fully leave our shores. There’s a tremendous amount of liquidity in the markets, thanks to the broad swaths of support measures rolled out by central banks around the world, which are sending various asset classes onto elevated levels.

Given the forward-looking nature of the markets, the optimism surrounding the global economic recovery has also sent equity benchmarks on a tear. US stocks advanced further overnight, with the Nasdaq hitting a new record high.

Even the beleaguered Hang Seng index has pared its losses since the March lows and climbed back above its 50-day simple moving average.

Riskier assets tend to climb higher at the expense of safe haven assets. Yet, even Gold has managed to maintain its upward trajectory, trading around its highest levels since 2012 while edging its way closer to the $1800 psychologically-important handle.

Bullion’s climb has been supported by near-zero US interest rates, as well as lingering concerns over the state of the global economy. Still, Gold’s rise in tandem in equities speaks more to the elevated liquidity levels in the markets which are lifting multiple asset classes simultaneously, despite its traditionally inverse relationship with risk assets.

Even Crude Oil has pared most of its losses since OPEC+ talks broke down in March and a price war broke out amid the pandemic. Since then, with OPEC+ having made amends and rolled out supply cuts, coupled with the fledgling recovery in global demand conditions, Crude prices are now laying claim to the $40/bbl handle, a psychologically-important level that was far from investors’ minds just a couple of months ago.

However, the Dollar index (DXY) has taken a leg down, breaking to the downside of the 98.8 – 101 range that it adhered to over the past two months. The DXY’s downward trend is confirmed with the 50-day simple moving average crossing below its 100-SMA, with Dollar traders apparently now more comfortable keeping DXY within the 95.7 – 97.7 range for the time being.

Although the Greenback is expected to remain relatively support amid safe haven bids, the softer Dollar can help improve the world economy’s chances of a recovery. For example, a weaker Dollar would boost corporate America’s profits, and also alleviate the pressures on emerging markets that have to pay back debt that are denominated in Dollars.

Still, King Dollar could be swiftly restored to its throne if the optimistic narrative in global markets is upended by a major risk-off event.

#source

Related

Stocks bounce back after Evergrande panic
Stocks bounce back after Evergrande panic

As investors increasingly liken the Evergrande crisis with the collapse of the Lehman Brothers in 2008, they remain in the dark about the Chinese government's intentions...

21 Sep 2021

Oil Was Put on Hold
Oil Was Put on Hold

The oil price is falling after rallying before. Early in another September week, Brent is trading at $74.50 and has a lot of room to correct. The strong greenback...

20 Sep 2021

Dollar starts Fed week on front foot, stocks hit by Evergrande fallout
Dollar starts Fed week on front foot, stocks hit by Evergrande fallout

Fears of global contagion from the worsening crisis in China's property sector continued to weigh heavily on sentiment at the start of trading on Monday as markets...

20 Sep 2021

Dollar jumps, gold slumps, stocks nervous
Dollar jumps, gold slumps, stocks nervous

Worries that the US consumer is rolling over were dealt a major blow yesterday after the nation’s retail sales for August overpowered some gloomy forecasts. The retail sales...

17 Sep 2021

Energy is the play: how we get to $100 crude
Energy is the play: how we get to $100 crude

Natural gas futures in Europe and the UK are flying, while our natural gas (NG) CFD (the underlying is traded on the NYMEX) pushed over $5.60 and into 7-year highs...

16 Sep 2021

Are investors sleeping on systematic risk in China?
Are investors sleeping on systematic risk in China?

It’s time to talk about China. The situation is getting dicier as the nation’s second-largest property developer - Evergrande - is on the verge of default. Trading in the company...

16 Sep 2021


Forex Forecasts

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.