The Collapse of the Weak US Dollar Trend

Share On Facebook
share on Linkedin
Print

The US dollar has started this week by losing its ground and has created a different interaction on global markets. The dollar index was 0.05% down at 100.84 at 02:45 ET. The EU political risk depreciated the dollar against the Yen by pushing down Treasury yields to one-week lows of 2.4%. Furthermore, GBP was flat after $1.2414 after dropping 0.7% on Friday and the AUD dipped 0.1% to $0.7670.

©

It seems like the weak dollar; which has previously supported the strengthening of the stock markets, does not support the market trend as it used to. While the commodity and the bond prices as well as the currencies of emerging economies are increasing against the US dollar, the concerns are raised for the global economy, putting pressure on stock markets. Additionally, with the FED not pointing out to any interest rate hikes in June as well as avoiding further monetary expansion contrary to BoJ’s expectation of the market and the failure to meet the expectations of the Chicago PMI, will most likely lead the US dollar to depreciate against other currencies.

The Dollar is weak and the global economy is murky:

– The latest US data announcement did not meet the expectations.
– Hopes of developments in fiscal stimulus plans under Trump have not materialized yet.
– China’s announcement over the weekend on April’s production activity, was inferior.
– A depreciation has occurred in Tokyo Stock Exchange.
– The European banking stocks have retreated.
– The markets were shaken due to the possibility of a win for far-right, anti-European Union candidate Marine Le Pen and especially after two French hard-left candidates on Friday stated that they were considering to cooperate in their bid for the country’s presidency.
– The concerns about the sustainability of the recent economic recovery heightened.

Yet again; whether this is temporary or not will depend on the outcome of the global economic data to be released in due time in the near future.

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20211204 05:36:25