Dollar Grinds Higher

Boris Schlossberg BKTraders and Prop Traders Edge

Market Drivers April 24, 2018
USDJPY Inches towards 109.00
GE IFO shows a slowdown
Nikkei 0.85% Dax 0.54%
Oil $69/bbl
Gold $1326/oz.
Bitcoin $9200

Europe and Asia:
EUR EZ IFO 102.1 vs. 102.6
GBP UK PSNB -0.28B vs. 0.9B

North America:
USD New Homes Sales 10:00

The dollar pushed higher for the second day in a row, but gave up some gains by North American open as both euro and cable bounced off lows while USDJPY stalled ahead of the 109.00 figure.

US yields hovered near the 2.96% level but so no push higher also helping to contain the greenback rally for the time being.

On the economic front the GE IFO data came in at 102.1 versus 102.6 eyed confirming that the region is seeing a slowdown in activity. IFO economists predicted that German GDP would increase at 0.4% versus 0.6% rate of Q4 which is consistent with the latest PMI reading from the EZ.

The news is likely to keep ECB firmly neutral in its monetary policy stance on Thursday and the single currency could see further weakness if President Draghi suggests that the central bank many not consider tightening rates until well into 2019. For now, however, the unit has found support at the 1.2200 level and rebounded off the figure into the NY open.

In the UK the better than expected PSNB figures which showed that the government ran a surplus for the first time since 2000 helped lift cable a but as well as the pair recaptured the 1.3950 level.

Overall, however, it still remains dollar’s game to lose. The greenback rally may have paused but looks to push higher as US rate remains elevated and US data shows steady growth. Yesterday’s Existing home data demonstrated that the housing market remains robust and if today’s New Home Sales beat to the upside they may push USDJPY through the key 109.00 figure busting the option barriers that have contained the pair most of the night. For now, the Fed is the only hawkish central bank in the G-7 universe and the market is starting to appreciate that reality.

Author

Boris Schlossberg

BKTraders and Prop Traders Edge

Boris Schlossberg was key speaker at the FXstreet.com International Traders Conferences 2010. Mr. Boris Schlossberg is a leading foreign exchange expert with more than 20 years of financial market experience.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.