Risk is on, the dollar is down

Arnaud Masset Swissquote Bank Ltd

Investors ended last week on a risk-on mood amid optimism regarding ongoing trade talks between China and the US. On Saturday, Treasury Secretary Steven Mnuchin said that the US and China were nearing the final stage of trade negotiations. The tone of the declaration was quite optimistic and suggested that the waiting would be finally over. A matter of days apparently. However, investors remained somewhat cautious despite the comments. The US government has been extremely optimistic over the last few months despite a clear lack of progresses. There is therefore the fear that the US delegation would under deliver, especially since China would also be able to enforce the agreement should the US reneges on certain part of the deal afterward – and vice-versa.

The buck continued to move lower on Monday morning with the dollar index reaching 96.80. The Swedish krone performed the best as USD/SEK eased 0.30% to 9.2454, while the pound sterling and the single currency were also edging higher, up 0.21% and 0.19%, respectively.

Stay on top of the markets with Swissquote’s News & Analysis

We believe that the dollar suffer more in the coming days amid rising tension between the Fed and Donald Trump. The US president suggested that the Fed should unleash liquidity to give a kick to economic growth. It would send a very bad signal to investors should the central bank starts taking order from the government as it hurt massively its credibility.

Author

Arnaud Masset

Swissquote Bank Ltd

Arnaud Masset is a Market Analyst at Swissquote Bank. He has a strong technical background and also works in the development of quantitative trading strategies.

EUR/USD hovers around nine-day EMA above 1.1800

EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.

Gold sticks to gains above $5,000 as China's buying and Fed rate-cut bets drive demand

Gold surges past the $5,000 psychological mark during the Asian session on Monday in reaction to the weekend data, showing that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Federal Reserve expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.