0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
More View more
Real Time News
  • The US Dollar is testing key support levels against the Singapore Dollar, Malaysian Ringgit, Philippine Peso and Indonesian Rupiah following persistent losses. Get your #ASEAN currencies market update from @ddubrovskyFX here: https://t.co/qqYDELqydd https://t.co/WPUL1SO8Fv
  • - #USDollar may catch a haven bid as the US and China lock horns over technology - #TrumpExecutiveOrders may encounter congressional friction, spark dash to cash - #bidenvppick announcement could fail to stir markets unless the choice is unexpected https://www.dailyfx.com/forex/fundamental/article/special_report/2020/08/10/US-Dollar-Comeback-Ahead-US-China-Tensions-Push-Havens-Higher.html
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.01%, while traders in US 500 are at opposite extremes with 77.49%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/AB97lqEJQB
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.18% 🇳🇿NZD: 0.13% 🇯🇵JPY: 0.12% 🇪🇺EUR: 0.08% 🇨🇦CAD: 0.05% 🇨🇭CHF: -0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/ThG7IBzIKu
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.67% France 40: 0.66% Germany 30: 0.60% Wall Street: 0.23% US 500: 0.14% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/2l1TvwiW5l
  • The Indian Rupee struggled to benefit from an unexpected RBI rate hold as the Nifty 50 inched closer to invalidating a bearish reversal signal. What is the road ahead for USD/INR? Find out from @ddubrovskyFX here:https://t.co/Zjiay6hQWT https://t.co/IdM8hb6pI1
  • Join @ZabelinDimitri 's #webinar at 11:30 PM ET/3:30 AM GMT to find out how geopolitical risk will affect the markets in the week ahead. Register here: https://t.co/hsULxMNOtM https://t.co/TJbPf8arC3
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.26% Gold: -0.27% Silver: -1.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/4Ap99p4ATh
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.18% 🇬🇧GBP: 0.16% 🇯🇵JPY: 0.14% 🇪🇺EUR: 0.09% 🇨🇦CAD: 0.08% 🇨🇭CHF: -0.04% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/5NRt7MMbs6
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.84%, while traders in US 500 are at opposite extremes with 78.33%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/NedpyrXTeR
US Dollar Forecast Hinges on Dow Jones, S&P 500, Nasdaq Composite

US Dollar Forecast Hinges on Dow Jones, S&P 500, Nasdaq Composite

2020-05-09 10:00:00
Daniel Dubrovsky, Analyst
Share:

US Dollar Forecast: Neutral

  • US Dollar trimmed gains as Dow Jones and S&P 500 rallied last week
  • Markets seem to be looking forward to the future despite dismal data
  • Coronavirus slowing as states eye reopening, case for stimulus fading?

US Dollar Weekly Recap

The haven-linked US Dollar wrapped up a mixed week as the Greenback trimmed most of its gains into the latter half of the past 5 trading days. Sentiment notably improved on Thursday and Friday as the S&P 500 and Dow Jones pushed higher. On the chart below, you can see the close inverse relationship between the US benchmark stock index with the US Dollar. Sentiment will likely continue driving Greenback price action.

Forex for Beginners
Forex for Beginners
Recommended by Daniel Dubrovsky
Forex for Beginners
Get My Guide

Investors seemed to cheer remarks from US and Chinese officials vowing to implement the ‘phase-one’ trade deal after fears of trade war escalation casted uncertainty into markets. Meanwhile, ebbing coronavirus cases and fatalities kept traders looking forward to a gradual reopening of state economies. New York Governor Andrew Cuomo noted that they are ‘finally ahead’ of the virus.

S&P 500 versus US Dollar

USD Road Ahead - Markets Missing the Prior Urgency and Tempo of Extraordinary Stimulus?

Thus far, dismal local economic data has been struggling to materially shift the cautiously upward momentum on Wall Street. Last week, the US unemployment rate shot higher to 14.7% as non-farm payrolls contracted a record -20.5 million. Granted, these readings were not quite as dismal as economists were estimating. Jobless claims also rose over 3.1 million in the last week of April as lockdown measures took its toll on the economy.

The markets may be hopeful for the future. Primarily, that growth should pickup on an upbeat tempo, pouring cold water on current mind-boggling data. In Australia, the RBA predicted that this year’s anticipated negative GDP print will be reversed in 2021. The Bank of England also envisioned a similar scenario as it left rates unchanged last week. These assumptions do however acknowledge the risk of a prolonged dent to growth.

Develop the discipline and objectivity you need to improve your approach to trading consistently

It is also becoming increasingly apparent that the speed and urgency of passing additional stimulus measures seems to be cooling. The slowdown in US virus case growth has also been accompanied with an ebbing expansion in the Federal Reserve’s balance sheet – see next chart below. In fact, on Friday the Fed announced that it continued to slow the pace of Treasury buying to US$7 billion per day, down from $8 billion prior.

US President Donald Trump acknowledged last week that he said he is ‘not in a rush’ for the next relief measure. The speed of the recovery on Wall Street has likewise been slowing. That could make it increasingly difficult for equity markets to set new highs absent a further material improvement in economic conditions. The risk also remains that as sates reopen, virus cases rise, opening the door to reversing lockdown easing.

With that in mind, it is a neutral call for the US Dollar fundamental outlook. Check out the newly-enhanced DailyFX economic calendar for a detailed overview of additional economic event risk ahead.

USD Forecast
USD Forecast
Recommended by Daniel Dubrovsky
What is the road ahead for the US Dollar?
Get My Guide
S&P500 versus fed balance sheet

--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.