Market news

Daily finance news update

OPEN LIVE ACCOUNT

Dollar momentum building

August 18,2021 07:02:52

Overnight Headlines

*USD surged back to recent highs amid Covid concerns and mixed data

*US stocks fell by the most in a month on dour risk sentiment

*NZD hits nine-month low before rebounding on RBNZ hawkish hold

*UK CPI headline misses (2% vs 2.2% expected) but reflects base effects

USD gained against most of its G10 peers on a safe haven bid amid mid-month rebalancing flows. DXY jumped the most in a week with CHF and JPY also closing modestly lower versus the greenback. NZD fell as much as 1.7% following the country-wide lockdown. The RBNZ decision to hold rates then saw the major fall to a low of 0.6868. But buyers have stepped in as Governor Orr struck a confident tone. Risk currencies like AUD also suffered with the aussie breaking down over 1% to the lowest level since last November. EUR is challenging key support above 1.17 while GBP slumped 0.8% and is holding near its lows.

US equities all closed lower with the S&P500 and Dow ending their five-day win streak. The Nasdaq was hit the hardest, down over 0.9% as defensive sectors outperformed for a fourth straight day. Asian markets are broadly higher this morning and both US and European futures are also pointing to better opens.

Market Thoughts – Data turns, FOMC minutes in focus

US retail sales came in weaker than expected as risk aversion weighed on stocks too. A shortage of goods and shifting demand to services saw US consumers, a key driver of the economy, hitting the brakes. Chair Powell kept his cards close to chest last night only saying that it’s not yet clear if the Delta strain will have important effects on economic activity.

Covid developments prevented the RBNZ from hiking today. That said, the bank clearly revised their rate path higher, forecasting the first hike later this year and four more in 2022. The minutes of the July Fed meeting are released this evening. All eyes are on the talk of the need to start tapering. We note the meeting was held before the strong July jobs data.

Chart of the Day – EUR/USD to finally break on hawkish Fed hints?

Tonight’s FOMC minutes are expected to give us a roadmap out of extraordinary stimulus. An increasing amount of Fed officials want to taper, indicating that substantial further progress has been made in reaching their goals. That means the 2% average inflation target while we’re only one or two strong jobs reports away in employment. The fact that the economy is actually suffering from supply issues as opposed to any lack of demand is an increasingly important issue, calling for a much faster taper.

The dollar (DXY) is delicately poised near its highs with the safe haven bid supporting in recent sessions. EUR/USD has retraced back off the 21-day SMA after Friday’s jump with bears targeting a breakdown through 1.1704. This level is looking more and more fragile with the dollar’s momentum increasing the chances of a move lower towards 1.1640 and then the November low at 1.1602. Strong resistance lies around 1.18.

Jamie DuttaAnalyst / Trader

"With extensive experience as a full time trader and financial market commentator, I have worked as a trader in top tier investment banks and trading houses, including Morgan Stanley and GAIN Capital trading Forex, Index derivatives. and Bonds. I combine technical analysis with a deep fundamental knowledge to identify trade set-ups. My real life experience allows me to break down the complexities of financial jargon and trading. This means everyone can better understand the compelling forces of greed and fear which are realised every day in countless ways across markets."

Vantage does not represent or warrant that the material provided here is accurate, current, or complete, and therefore should not be relied upon as such. The information provided here, whether from a third party or not, is not to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any financial instruments; or to participate in any specific trading strategy. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. We advise any readers of this content to seek their own advice. Without the approval of Vantage, reproduction or redistribution of this information is not permitted.

PEMBUKAAN AKUN CEPAT & MUDAH

  • Daftar

    Pilih tipe akun dan ajukan aplikasi pendaftaran Anda.

  • Danai

    Danai akun Anda dengan menggunakan beragam cara pendanaan.

  • Perdagangan

    Akses 300+ CFD instrumen pada semua kelas aset di MT4/MT5

Sangat mudah untuk membuka akun trading Forex dan CFD.
Selamat datang dalam semesta trading!
BUKA AKUN LIVE