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U.S. Dollar Looks Steady Even As Stocks Rebound

By Kevin BeckmanMarket OverviewMay 13, 2022 09:36AM ET
www.investing.com/analysis/us-dollar-looks-steady-even-as-stocks-rebound-200624169
U.S. Dollar Looks Steady Even As Stocks Rebound
By Kevin Beckman   |  May 13, 2022 09:36AM ET
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Global equity markets enjoy recovery ahead of the weekend as riskier assets' selling pressure has abated following a major slump witnessed earlier in the week. Most equities are now regaining ground as dip buyers reemerged after a sell-off. 

Bucking the trend, shares of Twitter (NYSE:TWTR) lost over 20% in pre-market trading before rebounding somewhat. Twitter stocks plunged amid a report that Elon Musk has put his bid to acquire the company on hold pending details supporting the calculation that “spam/fake accounts do indeed represent less than 5% of users”.

Despite the overall relatively upbeat tone in the financial markets, the safe-haven US dollar refrains from a pronounced bearish correction, clinging to the upper end of the extended trading range after yesterday's rally towards fresh twenty-year highs. USD bulls were deterred by the 105.00 mark, which now represents the buck's immediate upside target. The USD index oscillates around the flat-line on Friday, struggling for near-term direction. The greenback would resume the ascent after a pause and could slip to lower levels to attract renewed demand.

The risk-on tone doesn’t look sustained, with geopolitical and economic risks persisting, suggesting that global stocks will continue to trend lower in the short and medium-term. This, in turn, should help the US currency extend the historic rally, especially as the Fed stays committed to its hawkish approach towards tightening.

In the immediate term, the USD index could hold above 104.00, targeting 105.00. In a wider picture, the next major barrier, around 107.30 will come into the market focus if the buying pressure persists.

U.S. Dollar Looks Steady Even As Stocks Rebound
 

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U.S. Dollar Looks Steady Even As Stocks Rebound

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