Risk assets rise despite Dollar strength

Frank Walbaum

Important news this week

Tue, 22nd, 05:10 CET AU RBA Gov Bullock Speech.

Thu, 24th, 03:30 CET AU Unemployment Rate.

Thu, 24th, 09:30 CET CH SNB Policy Rate.

Fri, 25th, 11:15 CET UK BoE Gov Bailey Speech.

Risk assets rise despite Dollar strength

The US Dollar remains strong, yet stocks continue to move higher, led by the S&P 500 and Nasdaq. Dow Jones and DAX are still lagging behind. Crypto is also rising, with Bitcoin and Ethereum breaking above important technical resistance zones.

Metals are weaker as the stronger Dollar weighs on prices, while oil is also moving lower and has fallen back below $100. The overall picture remains mixed, with strong momentum in equities and crypto despite continued USD strength.

Market talk

The current divergence between the Dollar and risk assets is worth watching. Normally, a stronger USD can create additional headwinds for international equities and commodities, but the latest moves suggest that investors are currently focusing more on growth expectations and market momentum. The performance gap between the major US indices also shows that the recovery is not evenly distributed across the equity market.
Another important factor is the behaviour of assets around technical resistance. Breakouts can attract additional momentum-driven positioning, but they also need to hold to confirm that the move is sustainable. If these breakouts fail, markets could quickly return to the ranges seen in recent sessions. For now, the combination of rising risk assets and a strong Dollar creates an unusual but important market setup.

Tendencies in the markets

Equities positive, USD stronger, crypto strong, oil lower, metals weaker, JPY weak.

Author

Frank Walbaum

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