US Dollar weakness and equity strength



The US Dollar fell slightly last week, an unusual week considering Powell was not as dovish as expected and Non-Farm Payrolls beat expectations Friday. The Dollar Index (DXY) fell 0.7% to close the week at 97.12.


A very quiet week on the Euro front as it remained sideways, Mario Draghi finally passed over his position as ECB chairman to Christine Lagarde as the new ECB chairwoman. In light of this EUR/USD finished the week trading below just below the all important 1.12 mark.


The Pound has remained very strong, but is still incredibly volatile, we can clearly see short positions being squeezed as a no-deal Brexit scenario continues to look unlikely. Due to this, GBP/USD looks to be heading back towards the all important 1.30 level.


A fairly strong week on the Yen front, with the Japanese currency pushing higher alongside equities, which is unusual.


A fairly positive week for both pairs, which both ended up around 1% on the week versus the USD, benefiting from the broader “risk on” theme.


Global stock averages continued to show more strength to the upside last week, it is still clear to us that the threat is for more upside gains. It seems like any piece of positive news from the US is enough to send equities to new highs. The S&P 500 once again finished the week hitting a new all time high, rising over 1.5% to 3065, whilst the German DAX gained 0.6%, but due to recent Pound strength, the FTSE100 finished 0.5% lower.

The Week Ahead

The week ahead will see traders focused on the GBP as political parties start to develop their election campaigns. We also need to watch for further headlines from the US-China trade talks.
On the macroeconomic front we have many important global PMI releases through the week, as well as the interest rate decisions from the Bank of England on Thursday and ahead of this, the Reserve Bank of Australia on Tuesday morning. Until next week, Happy Trading!

Bryce Willmott


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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