FX Handover: Short Covering Boosts Dollar
|Markets still buoyed by hints of Fed cut ahead of ECB and NFP
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Short-covering had helped to boost the dollar after its multi-session falls following the Fed’s dovish hold last week. Safe haven assets which had rallied sharply overnight were on the retreat with gold coming off its multi-year overnight highs although yen was still in the positive. Franc was the weakest.
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Most majors had already created daily ranges consistent with their ATR (10), meaning dollar’s bears may see this as an opportunity to re-enter at better levels as we head to the start of the US session.
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We think stocks could resume higher this week, with investors likely to anticipate a positive outcome from the G20 meetings regarding US-China trade spat.
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