Dollar Subdued Despite Risk-Off Trends

www.investing.com/analysis/dollar-subdued-despite-riskoff-trends-200624575

By Kevin Beckman | May 19, 2022 09:36AM ET

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After a short-lived pause, the dollar is back under pressure on Thursday, threatening fresh local lows during the European hours. The greenback remains the laggard even as risk aversion intensifies across the financial markets amid persistent inflation concerns.

During the recent bounce, the USD index failed around 104.00 and slipped to two-week lows, bringing the market focus back to the 103.00 mark. In part, the dollar’s appeal was further dented by the resurgent demand for the euro after the accounts of the ECB's policy meeting showed that members expressed concerns over high inflation numbers. At that, some members highlighted the importance of acting without undue delay in order to achieve price stability.

The key driver behind the euro’s jump was report that the majority of ECB policymakers are said to be prepared to back at least two 25 bps rate hikes this year (some are leaving the option open for three hikes). Against this backdrop, EUR/USD advanced to the 1.0550 zone that seems to be capping more robust gains, suggesting the euro’s upside potential remains limited despite a more hawkish tone by the ECB.

In a wider picture, the ongoing retreat in the buck looks like a bearish correction from multi-year highs at this stage. The overall uptrend remains intact, especially as the Fed continues to outperform other central banks in tightening while the USD’s safe-haven status keeps it afloat in turbulent times that will persist in the longer term as well. Still, the dollar index could challenge the 103.00 figure to probe May’s lows around 102.35 on a short-term horizon.

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Central Banks

Interest Rates

Next Meeting

FED

1.75%

Jul 27, 2022

ECB

0.00%

Jul 21, 2022

BOE

1.25%

Aug 04, 2022

SNB

-0.25%

Sep 22, 2022

RBA

0.85%

Jul 05, 2022

BOC

1.50%

Jul 13, 2022

RBNZ

2.00%

Jul 13, 2022

BOJ

-0.10%

Jul 21, 2022

CBR

9.50%

Jul 22, 2022

RBI

4.90%

Aug 04, 2022

PBOC

3.70%

BCB

13.25%

Aug 03, 2022

US 30	31,487.3	+809.9	+2.64%
US 500	3,909.1	+113.4	+2.99%
Dow Jones	31,500.68	+823.32	+2.68%
S&P 500	3,911.74	+116.01	+3.06%
Nasdaq	11,607.62	+375.43	+3.34%
S&P 500 VIX	27.23	-1.82	-6.27%
Dollar Index	103.895	-0.297	-0.29%

Crude Oil WTI	107.06	+2.79	+2.68%
Brent Oil	113.19	+3.14	+2.85%
Natural Gas	6.173	-0.066	-1.06%
Gold	1,828.10	-1.70	-0.09%
Silver	21.130	+0.088	+0.42%
Copper	3.7365	-0.0025	-0.07%
US Soybeans	1,609.00	+15.75	+0.99%

SPDR S&P 500	390.08	+12.02	+3.18%
iShares Russell 2000	175.09	+5.26	+3.10%
Invesco QQQ Trust	294.61	+9.76	+3.43%
Direxion Daily Junior Gold Miners Bull 2X Shares	41.52	+2.75	+7.09%
iShares Silver	19.51	+0.14	+0.72%
ProShares Ultra VIX Short-Term Futures	14.39	-0.40	-2.70%
ProShares UltraPro QQQ	27.98	+2.65	+10.46%

Apple	141.66	+3.39	+2.45%
Alphabet A	2,359.50	+114.66	+5.11%
Tesla	737.12	+31.91	+4.52%
Amazon.com	116.46	+4.02	+3.58%
Netflix	190.85	+9.14	+5.03%
Meta Platforms	170.16	+11.41	+7.19%
Bank of America	32.31	+0.23	+0.72%

Dollar Subdued Despite Risk-Off Trends

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