The dollar has continued to weaken as dollar crosses were egged lower by comments from Treasury Secretary Mnuchin that a weak dollar is positive for US trade, but structural forces remain very much in play, in view of analysts at Nomura.
Key Quotes
“There has been a noteworthy breakdown between the FX and rates relationship in recent months .We think there are five factors that explain the divergence: (1) USD has already rallied too much for a Fed hiking cycle; (2) starting a tightening phase matters more than mid-way hikes; (3) the US trade deficit is a problem; (4) Euro is winning the capital flow battle; and (5) CNY policy.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.0900 after dismal German data, EU/ US inflation eyed
EUR/USD is extending the pullback below 1.0900 after Germany's Retail Sales disappointed by a wide margin early Friday. The pair retreats from weekly highs amid a broad US Dollar rebound, as investors turn cautious ahead of the Eurozone and US inflation data.
GBP/USD holds steady below 1.2400 after mixed UK data
GBP/USD is holding steady below 1.2400, having eased from two-month highs at 1.2423 in the early European morning. The pair is weighed down by the mixed UK economic data and a minor pullback in the US Dollar. Focus now remains on the US PCE data.
Gold: Inflation data, $1,973 support to restrain bears
Gold price pares weekly losses while easing from an intraday high to $1,980 during early Friday morning in Europe. In doing so, the yellow metal traces the market’s consolidation ahead of the key Eurozone and the US inflation clues.
Will Dogecoin price pull an XRP and rally 60% next week?
Dogecoin price has been in a tight range bound movement since November 22. The recent recovery above the range low looks promising and hints at an explosive move for next week.
Euro area HICP Preview: Peak inflation or base effects? No trade-off for ECB (for now) Premium
“There is no trade-off between price and financial stability,” ECB President Lagarde said earlier this month, following the announcement of a 50 bps rate hike despite the banking sector turmoil.