US Dollar rebounds with stock still strong

Intermediate

Recap for 4th-8th November 2019

USD

The US Dollar made a slight reversal last week; however, it continues to trade in a very volatile way. We saw strong ISM data, which helped boost the dollar higher, but its main driver was the US/China trade talks progression. As a result of this, the Dollar Index (DXY) rose 1.3% to close the week up at 98.40.

EUR

The Euro made a push to the downside last week, although we did see some fairly positive signs from EU economic data, traders are now waiting for GDP and CPI numbers to be released to really show us progress on the European economy. In light of this, EUR/USD finished down 1.3% on the week, trading just above the all important 1.10 mark.

GBP

The Pound started to see some weakness after the BoE interest rate decision, where two dissenters voted to cut rates. However, we saw the Pound close the week reasonably flat, proving to us its strength once again. This upside could continue until the next major event – December general elections.

JPY

A fairly negative week on the Yen front, following its correlation with risk assets it finished the week lower by 1% versus the USD.

AUD & NZD

In light of last week’s gold sell off, we saw also commodity currencies sell off and both dropped around 1% versus the USD

EQUITIES

Traders were happy with the news regarding US/China trade progression, and as a result of this we see equities continue their path higher. The S&P500 finished the week up 0.8% to 3091, the DAX is now very close to hitting all time highs itself and gained 2.3% to close at 13257, and the FTSE 100 remained very sideways and finished at around 7380.

The Week Ahead

All eyes yet again will be on the US/China trade talks as it has recently been giving traders some major headlines to act upon.

On the macroeconomic front we will be faced with a particularly busy week, with GDP prints from the UK, Eurozone, Norway, and Japan throughout the week. Also, we have CPI releases from the US, UK, and Norway. Finally, the RBNZ will be meeting Wednesday and is highly expected to cut rates by 25bps.
Till next week, Happy Trading!

Editor

Bryce has over 3 years of experience managing his own personal investment portfolio. In 2018 he completed a BA (Hons) degree from the University of Sussex in Event Management. He then went on to ta...continued

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