Dollar Index: 2008/09 parallels point to sustained USD strength – Westpac

FXStreet Team FXStreet

Late-2008/2009 offers a highly relevant historical analogue for the near term USD outlook, Richard Franulovich from Westpac Institutional Bank reports.

Key quotes

“The parallels with recent USD price action are obvious; the DXY squeezed 9% higher over a more compressed two week period by 20th March, only to give back roughly half those gains by month’s end, reflecting broad global policy relief and an easing in USD-funding scarcity.”

“But if late 2008/2009 is any guide the USD is likely to stabilise soon and resume a broadly strong tone. Back in 2008/09, once the initial USD squeeze and partial reversal were complete, the USD subsequently regained its footing and held solid well into mid-2009.”

“If that scenario plays out again in 2020 that would imply currencies are on the cusp of once again broadly track in line with their sensitivity to risk aversion.”

Author

FXStreet Team

FXStreet

EUR/USD treads water above 1.1850 amid thin trading

EUR/USD stays defensive but holds 1.1850 amid quiet markets in the European hours on Monday. The US Dollar is struggling for direction due to thin liquidity conditions as US markets are closed in observance of Presidents' Day.

GBP/USD flat lines as traders await key UK and US macro data

GBP/USD kicks off a new week on a subdued note and oscillates in a narrow range near 1.365 in Monday's European trading. The mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold slides below $5,000 amid USD uptick and positive risk tone; downside seems limited

Gold attracts fresh sellers at the start of a new week and reverses a part of Friday's strong move up of over $150 from sub-$4,900 levels. The commodity slides back below the $5,000 psychological mark during the Asian session, though the downside potential seems limited amid a combination of supporting factors.

Bitcoin, Ethereum and Ripple consolidate within key ranges as selling pressure eases

Bitcoin and Ethereum prices have been trading sideways within key ranges following the massive correction. Meanwhile, XRP recovers slightly, breaking above the key resistance zone. The top three cryptocurrencies hint at a potential short-term recovery, with momentum indicators showing fading bearish signs.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.