Mnuchin Supports Strong Dollar

Mati Greenspan eToro Cyprus

Today's Highlights

Flat Jones (DJ30)
Mnuchin Supports Strong Dollar
Hail to the Yellow Haired Chief

Please note: All data, figures & graphs are valid as of January20th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Going into this most momentous day markets around the world are quiet... perhaps a bit too quiet. Everything was rising hard and fast for the period between Trump's election on November 8th and the Federal Reserve rate hike on December 12. Since then things have levelled off.

In fact, the DJ30 has not moved more than 1% up or down since mid-December, making this the flattest period for this index EVER.

Our clients, though they were extremely bearish last week have also levelled off a bit, with the sentiment showing 77% bearish on the Dow. This, as 5 of the last 6 trading days closed in red for this index.

Asian markets are very mixed, not only in their performance but in volatility is well. There just doesn't seem to be any consensus among global stock markets at the moment.

The Weak Strong Dollar

The currency markets on the other hand are alive and moving. Oddly enough, the US Dollar is the loser so far today.

This is strange considering comments from two major players...

1. Janet Yellen in a speech last night stressed that interest rates are set to rise.

2. Steve Mnuchin, Trump's chosen Treasury Secretary supported the strong Dollar policy in his hearing yesterday. Explaining that Trump's comment about the Dollar being too high was intended for the short term, but for the long term the green back should rise.

In any case the Dollar is down for now, so if you are looking for a good entry point to get in you may be able to find it today.

The Inauguration

Trump's been planning this for 2 months and will likely be the biggest party of his life.

As far as trading opportunities, it's not so clear. Several traders on the eToro network are expecting to see some declines in the stock indexes, they're even calling it "buy the election, sell the inauguration."

Either way, it may be a good idea to moderately reduce your exposure on any risky assets and monitor the markets closely throughout the day. If things start getting out of control feel free to jump right in.

The more important thing that people will be looking at are the first few weeks and months of his presidency, that should give us a better picture about how to invest for the long term.

Have a fantastic weekend!

Author

Mati Greenspan

eToro Cyprus

Producing social finance marketing materials by E-mail, blogs, and videos. Project manager for the eToro Blog Site, assisting paid users to submit content. Assisting VIP clients to deposit and manage portfolios of ov

GBP/USD revisits 1.3530; Dollar pushes harder

GBP/USD adds to the weekly correction and recedes toward the 1.3530 zone on Friday. Indeed, Cable faces increasing selling pressure on the back of extra gains in the Greenback, particularly fuelled by Chair Warsh’s speech at the Jackson Hole Symposium and the US NFP Annual Revision (-79K).

EUR/USD breaches below 1.1600, multi-day lows

EUR/USD now accelerates its decline and retreats to seven-day troughs in the sub-1.1600 region at the end of the week. The pair’s pullback comes on the back of the strong rebound in the US Dollar after Chair Warsh delivered a hawkish message in Jackson Hole, while the US NFP Annual Revision came in at -79K.

Gold challenges its 200-day SMA near $4,530

Gold’s decline gathers fresh steam, hitting weekly lows while disputing its critical 200-day SMA near $4,530 per troy ounce. The yellow metal’s increasing weakness comes in response to the generalised upbeat tone in the US Dollar and the widespread rebound in US Treasury yields, as investors continue to reprice a Fed rate hike in September.

Crypto Today: Bitcoin, Ethereum, XRP rally loses steam despite steady ETF inflows

Bitcoin is back below $80,000 at the time of writing on Friday, after a second attempt at breaking resistance between $81,000 and $82,000. Meanwhile, Ethereum and Ripple mirror Bitcoin’s cooling trend, with ETH sliding to $2,500 and XRP falling toward $1.40 support.

Week ahead – RBNZ and BoC decide on rates ahead of all-important US NFP

Dollar rebounds ahead of ISM PMI and NFP data. RBNZ is expected to raise rates; focus to fall on forward guidance. BoC is set to remain on hold; will it raise rates in 2027?

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.