The USD didn't want to be left behind from the party, as the #USD #DXY registered a rally last Friday well above the 94.48 breaking the May initial high of 94.29. It has been a gradual climb for the USD well within three (3) consecutive months until reaching its recent high at 95.13 while closing for the week at 94.87.
A firm tone for USD sentiment remains suported by the recent figures from a stellar Retail Sales report, Low Jobless Claims & the ECB statements maintaining low Interest Rates until 2019 while ending their Asset Purchase Program. However, the market is focused on the tensions arising from the USD / China trade war building up and other US allies that may also be affected.
A 'tit-for-tat' is expected more between the two major economies and how these would directly and indirectly affect other countries in the emerging markets particularly in Asia. As the USD strength and interest rate hike have already dampened most global equities and currency value in the pacific region.
This resulted the EURO back down at 1.1562 a slight overshot from our 1.1580 objective, the USDCHF at 0.9988 high nearing a rewind towards it s parity levels. Meanwhile, CABLE have registered a low at 1.3210 which run short of our objective at 1.3180 and the AUSSIE Dollar loosing more ground with a low at 0.7440 as the USD surged.
The USDJPY have remained at their own 110.65 levels a tight alignment from its price range for the past 5 consecutive weeks. However. its price action and similar trajectory correlated with the Nikkei 225 Overlay USDJPY is well defined in the near term direction.
Last but not necessarily the least is the relative reaction that carried the USDCAD well above the 1.3200 levels; a fresh incentive that drove the USD strength from all sides of the global market. The near term incentives for the USD strength can draw similar market sentiments towards the Loonie as it projects a revisit of a higher record high after similar corrective moves are in place.
Based on the recent FOMC move and expectation of three more rate hikes; the USD for now is poised to stay relevant and in a steady tone for as long as no sudden changes in their guidance.
ReplyDeletePrice Action for the USD DXY would be well monitored especially nearing the end of the 2nd quarter trading and entering the third quarter. Likewise, will be keeping a close eye on treasury yields moving forward.
Price Update: As of June 20, 2018 Asia / European Session
USD Index - DXY Weekly price
Open - 94.73 High - 95.29 Low - 94.61
Rhetoric and tit-for-tat measures on trade war between the US and China along with the rest of its trading partners would take time but eventually be ironed out. This is another one of those issues that would be taken care of in a manner of speaking in comparison with the North Korean rhetoric that almost drove tensions greater that disrupted global stocks and currencies at their worst levels during those times.