Strong positive risk sentiment despite Dollar gearing up steam

Frank Walbaum FX Strategies.Asia

Important news for the day

Thu, 31st, 04:57 JP BoJ interest rate decision.
Thu, 31st, 14:30 US Core PCE price index.
Thu, 31st, 14:30 CA Gros domestic product.

Fed aftermath

As previously expected Jerome Powell did not cut interest rates. He claims that due to a strong economic development rates don’t need to be cut further for now. Equities initially lost some steam but started to look positive thereafter. The Dollar resumed its strength and looks set to push back to higher levels again. Based on the daily chart the EUR/USD currency pair also broke the 50 -moving average zone, which could be taken as a negative sign. On the other hand the AUDUSD currency pair has started to rise slightly more as compared to other currencies against the Greenback. As the risk sentiment remains solid, prices of Gold and Silver also started to weaken. The bearish turnaround might hence be ongoing.

Market talk

The ongoing tariff story in the US seems to not cause major disruptions in financial markets currently. A stronger than expected gross domestic product of 3.0% instead of the projected 2.5% started to push the Dollar higher after the news came out. The price of the imposed tariffs will seemingly be paid by the US population, while at the same time also ADP employment data suggest strong demand for labour. Donald Trump might still remain furious as Jerome Powell did not cut rates. he should not forget that he himself installed the head of the Federal Reserve Bank back then.

Tendencies in the markets

Equities sideways, USD stronger, Bitcoin positive, ETH positive, oil rising, Silver lower, Gold weaker, JPY weak.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

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