US Dollar weakness and equity strength

Beginner

USD

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.

EUR

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.

GBP

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.

JPY

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

AUD & NZD

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.

EQUITIES

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!

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

Comments on this analysis

Your email address will not be published. Required fields are marked *


Latest Related News

Pound upside risks with a weaker US Dollar (GBPUSD Forecast)

The “risk on” phase has extended through late May into this week, with global stock averages surging to new cycle highs.In the Forex world, the US Dollar continues to weaken (alongside the Japanese Yen), seen very much as a safe haven currency in the COVID-19 world.The positive global view continues to be driven by hopes the easing of lockdowns and the reopening of the global… Continued

Equity bull theme resumes (despite US-China tensions)

Macroeconomic/ geopolitical developments The positive “risk on” theme was again reinforced by additional positive steps regarding the launch of an €750bn EU recovery fund. The “risk on” theme was evident despite tensions between the US and China increasing in late May, intensified by developments surrounding Hong Kong.However, President Trump did not indicate economic sections and was seen as less dramatic than feared at Friday’s press… Continued

NZDUSD monthly trend line retest

The price broke the massive monthly trend line during sell off in March and now we see a retest of that trend line at a strong resistance zone at 0.62. New Zealand was highly effective in its response the pandemic and a pullback of the stock market created a risk on environment for the currency to bounce back. The FED printed trillions of dollars and… Continued

US Dollar weakens across the Forex board

US Dollar Index breaks key support (DXY forecast)Euro-Dollar breaks up (EURUSD forecast)Aussie-Dollar major resistance weakens (AUDUSD forecast) Continued

Euro upside risks – EURUSD Forecast

The “risk on” theme continues with global stock averages again pushing to new cycle highs, and the US Dollar stays relatively weakened as a safe haven currency.Here we review the positive outlook for the EURUSD forecast. EURUSD day trade outlook: Upside risks through key 1.1039, maybe for critical 1.1147 A Wednesday rally to overcome notable 1.1009/19 rebound peaks, to build on Monday's small dip and… Continued

Forex Brokers in your location