US Dollar getting stronger

Daily Analysis - 08/01/2019

FED may pause rate hikes and support the greenback


On Tuesday, the greenback was weak versus its rivals. Traders thought that the FED will probably not increase interest rates for 2019 due to uncertainties that may further support the retardation in global growth.

The USD was a little stronger versus the Japanese yen, after falling about 0.2% earlier in the trading session. Investors speculate that the economic tightening cycle in the US has been suspended for 2019.

Fed Chairman Powell told the American Economic Association Last week that the Fed will probably pause the hike of interest rates and it will be more cautious. Sim Moh Siong, currency strategist at Bank of Singapore said "The Fed is listening to the market and has acknowledged flashing market signs, "The dollar index was marginally higher, getting 95.79.

Gold falls on greenback recovery

On Tuesday Gold dropped while risk desire increased on speculation that the United States and China are close to achieving a trade deal. All this while the popular dollar jumped off an almost 3 month low. The U.S. gold futures moved 0.5% below to $1,283.50 while Spot gold went under 0.5% to $1,282.69. A very important statement from Mark To, the head of research at Wing Fung Precious Metals came to support gold by saying

"Because of improved investor sentiment, gold is coming off its highs and may have to stay around the current levels," "The market has been troubled by uncertainties around trade war and interest rate hikes. However, now most of the stakeholders, including the authorities in U.S., China, and the Fed, are trying to cooperate and put up a positive tone and create a stable environment for investors."


US-China trade talk boosts Oil

Early today Oil climbed due to confidence that U.S.-China trade talks will probably stop the damaging trade conflict between the world's biggest economies. Additional support to the oil confidence is the OPEC-led supply cuts. International Brent crude futures were up about 44 cents at $57.76 per barrel while the U.S. West Texas Intermediate (WTI) crude oil futures gained more than 30 cents at $48.85 per barrel.


Stocks gained positive momentum on trade talks

On Monday Stocks advanced in a rough trading day while traders examined the newest U.S.-China trade improvements. Stocks were mainly in the positive and joined a huge rally in the previous session. The S&P 500 advanced more than 0.5 % and ended at 2,549.70 while the popular Dow Jones Industrial Average rose more than 98 points to 23,531.30 following a short drop of about 131 points.

The Nasdaq Composite improved more than 1.2% to 6,823.45, noting Amazon shares climbed more than 3 percent.


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