Another stock exchange crash can boost USD positions

Posted 12 February, 2018

Last week stock market development had a bigger impact on currency sector in the form of pressure on high-yields assets and more active demand for US dollar as a protective asset, a market analyst believes. Today risk-off policy has taken a back seat, and stock markets are attempting to recover, which affected interest in the US currency. However, it is highly probable that stock market weakening is yet to run dry after the longest upturn, so the greenback has a good chance to leap.

Once stocks have faced new selloffs confusing many investors these days, insiders are careful now and do not rush to buy cheap stocks. The investors’ mood can weaken dramatically again even before it has improved, while bond yields can resume rising entailing new risks of more active monetary tightening by global central banks.

As things stand, commodity currencies are under the major risk being additionally depressed by the oil market on risk-off steps. However, European currencies can also move down if the US dollar will get a firm foundation for its rebound. 

In this context, a lot will depend on the US inflation data to be announced this Wednesday. If consumer prices show a slower increase after the December hike, investors will somewhat calm down and bulls will become disappointed with the US dollar. Otherwise, risk assets will face challenges.

Previous forecast

13 February, 2018 10:43

← Japanese yen shows rise on Tuesday

Japanese yen remains quite strong in the US dollar pair. The USD-JPY price was 108.7 this morning. The rate can hit the February bottom soon and head to the September minimum. Japan has announced diverse data for the yen today. The producer price index in the country increased just 2.7% y-o-y in January (3.0% y-o-y in December).

Japanese yen shows rise on Tuesday

Next forecast

12 February, 2018 15:34

Large speculators boost bitcoin purchases by 36% on CBOE – COT →

The Commodity Futures Trading Commission (CFTC) released the Commitments of Traders (COT) for the week ending last Tuesday. Non-commercial traders reduced net short position on bitcoin contracts by 100  to 2,040. Large speculators started cutting net short position after raising it for 5 out of 7 last weeks. As for nonreportable positions, net long position on bitcoin contracts rose dropped by 100 to  2,040.

Large speculators boost bitcoin purchases by 36% on CBOE – COT
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