It seemed very unlikely that global political uncertainties would rekindle so fast after the French election, in which the second round between Emmanuel Macron and Marine Le Pen was a non-event.
Yet, as often in financial markets, uncertainties are coming from where it was not really expected. And those uncertainties are now coming from the US and more precisely, from the Oval Office.
The President Trump issue regarding the FBI investigation are weighing on credibility while rumours are growing that an impeachment procedure may at some point take place. Yet, we remain suspicious of that at this point but can see the dollar is getting weaker. This year was expected to be calmer for financial markets, but it may yet be complicated for Western countries.
On top of that, the equity markets had their worst day yesterday since Brexit. The S&P lost almost 44 points. This also supports the bearish move on the dollar. Anyway our view remains the same as we believe the economy is underestimated. We now consider that we are still at the start of a risk-off move and that gold is set to to strengthen further.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
Recommended Content
Editors’ Picks
EUR/USD keeps range above 1.0800 after German Retail Sales data
EUR/USD struggles to gain traction and continues to move in a tight channel slightly above 1.0800. The data from Germany showed that Retail Sales declined by 1.9% on a monthly basis in February, making it difficult for the Euro to attract buyers.
GBP/USD stays depressed below 1.2650 amid market caution
GBP/USD remains defensive below 1.2650 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price bulls keenly await US PCE Price Index on Friday before placing fresh bets
Gold price (XAU/USD) continues with its struggle to make it through the $2,200 mark on Thursday and oscillates in a narrow trading band through the early part of the European session.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
The other terminal rate: How far will policy rates be cut?
Recent communication by the Federal Reserve and the ECB has made it clear that the first cut in official interest rates is coming. Both central banks are saying the same but the ECB communication is more opaque than that of the Fed.