The USD Continues to Reign the Markets [Video]

Frank Walbaum FX Strategies.Asia

Stock Markets Wobble

Stock markets in Asia noted a bearish close this morning despite a Wall Street overnight rally with the S&P 500 and the Nasdaq Composite (NAS_100) closing in record-high territory. In Europe, markets started the day on a bearish note with the pan-European Stoxx 600 down around 0.25% shortly after the opening bell and most major bourses in negative territory. Europe’s auto-shares led the losses during early morning trading, after Nissan slashed its full-year profit forecast to a near-decade low.

Dollar Near 22-Month High, Aussie Sinks

The U.S. dollar hovered near a 22-month high against its peers on Wednesday morning after strong U.S. housing data eased concerns towards the world’s biggest economy. Elsewhere, the Australian dollar tumbled to a six-week low on Wednesday as soft domestic inflation reinforced prospects of monetary easing. The Aussie was last seen trading down 0.9 percent at $0.7036 as of 7:15 GMT. The New Zealand dollar was also dragged lower along its Australian counterpart with the kiwi last seen trading 0.6% lower against the dollar. A strong greenback is currently leading the markets and could head even higher. The USD Index is also suggesting further upside if it breaks above the 97.70 resistance.

Dovish BoC Ahead?

Market participants will be largely focused on a BoC Interest Rate Decision later in the afternoon with forecasts pointing to a no change and a shift to a neutral bias. Meanwhile, the CAD remains weaker across the board, which could point to a more dovish than expected stance by the BoC later in the day

Sterling’s Woes are Far From Over

The lack of any positive Brexit news is leading to a softer Pound, with markets lacking support, we could see the sterling fall to much lower levels very soon. The cable closed at daily lows on Tuesday while we could see the GBP/USD slipping back below the key 1.2800 level today.

Gold and Oil Tumble

Gold prices fell on Wednesday to hover around a four-month as the dollar gained on strong U.S. housing data. XAU/USD was last seen trading flat at $1272.07 as of 8:05 GMT, well below its key $1300 level. In today’s energy markets, oil retreated further back from near its highest level in 2019 on Wednesday, as a rally caused by impending US sanctions on Iran lost its steam. International benchmark Brent crude (CL_BRENT) fell 0.5 percent to $74.14 a barrel as of 8:05 GMT this morning, while West Texas Intermediate (USOIL) dropped 0.6 per cent to $65.87.

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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