Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Greenback Regained Strength Filling All Opening Gaps

Published 03/04/2019, 06:32 AM
Updated 07/09/2023, 06:31 AM

Market Drivers March 4, 2019

  • Market fades all dollar weakness
  • UK PMI Construction in recession
  • Nikkei 1.02% Dax 0.14%
  • Oil $56/bbl
  • Gold $1287oz.

Europe and Asia:

  • AUD AU Building Permits 2.5% vs. 0.0
  • GBP UK PMI Construction 49.5 vs. 50.3
  • EUE EZ Sentix -2.2 vs. -3.1

North America:

  • USD Construction Spending 8:30

The dollar tumbled at the start of week’s trade on news that US-China talks were near agreement and comments by President Trump seeking a weaker currency. However, the selling did not last and by London open the greenback regained it strength filling all the opening gaps.

Over the weekend US-China negotiators suggested that much progress had been achieved in the talks and the contours of a deal were starting to materialize. It appears that US will lift all sanctions against Chinese goods in return for Chinese buying greater quantity of US exports. It’s still not clear what agreements will be made on intellectual property issues or US’s ability to do business on the ground – the two far more important matters that remain unresolved.

Still, the markets took the news to heart rallying commodity currencies hard with Aussie spiking to .7108 and kiwi rising to .6827. But the euphoria soon faded as a patch of weaker than economic data from Asia and Australia dampened investors spirits.

Many analysts, including yours, truly have made the point about a massive disconnect between the euphoria in the risk markets and the decidedly downbeat economic news on the ground. The economic surprise index is now at a five year low and equity and high beta currencies can’t coast on easy monetary policy forever.

This week may be set up as a resolution to this conflict with a slew of economic data hitting the screens throughout the week. No doubt the bulls are trying to look past the wobble in Q4 of last year and are betting on the rebound as we enter spring. So far, however, aside from improved sentiment surveys few signs of actual economic pick up exist and the longer that trend persists the bigger the probability of risk-off flows which will bring with them a dollar rally, much to the chagrin of the President.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.