Home > XE Currency Blog > XE Market Analysis: The Greenback is in a Buoyant Mood Ahead of Chinese Data Release

AD

XE Currency Blog

Topics6214 Posts6259
By xemarketanalysis January 18, 2019 11:49 am
    xemarketanalysis's picture
    xemarketanalysis Posts: 649
    XE Market Analysis: The Greenback is in a Buoyant Mood Ahead of Chinese Data Release

    OVERVIEW

    •  The Dollar Index is up 0.15%, looking towards a higher weekly close. 
    • Risk-on sentiment returned and gold is trading 0.7% lower. World equity markets are in green.
    • NYMEX WTI Crude marches higher 0.75% to trade near $52.50 a barrel.

    HIGHLIGHT

    The Canadian loonie is trading in a consolidation zone over the five sessions after appreciating nearly 3.5% since the beginning of the month. Recent moves have been closely linked to ongoing partial government shutdown south of the border and higher oil prices. Recent data also points to inflation creeping higher and may push the Bank of Canada to revisit its monetary policy at its next meeting (March 6th). 

    US DOLLAR

    The US dollar is set to make a higher weekly close for the first time this year. The DXY index jumped after reports (later denied) surfaced that the US Administration will be removing Chinese tariffs to ease trade tensions.  The government shutdown continues, and the weekend could be crucial to final a resolution to ongoing political bickering.

    China is also releasing heavy-duty data points about retail sales, unemployment and industrial production numbers over the weekend which could generate more volatility. Sterling is trading lower this morning on profit-taking moves. NYMEX WTI Crude oil is up 1.23% on new trade optimism, adding to buying interests for commodity currencies.

    BRITISH POUND

    The British Pound is under some selling pressure this morning with a bout of profit-taking activities. GBP/USD had earlier rose to its highest level in nine weeks. Expectations are running high that the UK government will concoct a new Brexit deal that will get Parliament approval and agreeable to the EU.

    Unless Brexit goes to another referendum or is delayed,  the EU on March 29 and with time running out, an extension to the exit date could also be one of the many options. Meanwhile, retail sales came lower than expected, shrinking 0.9% in December 2018 compared to the previous month. The annual growth rate for 2018 (+2.7%) revealed a market slowdown compared to the peak of 4.7% experienced in 2016.

    EURO

    The EUR/USD is still in consolidation mode, oscillating around the 1.14 mark for the third session in a row. Lack of strong data out of the Eurozone has motivated investors to remain on the sidelines, avoiding any heavy directional bets. 

    Moreover, the recent economic numbers have highlighted weak fundamentals and the ECB is expected to keep its current monetary stance past the coming summer.

    CANADIAN DOLLAR

    The Consumer Price Index in Canada rose 2.0% on a year-over-year basis in December, following an increase of 1.7% in November. The latest figures released from Statistics Canada showed higher prices offset all lower energy prices in other services. USD/CAD is trading around the mid-point of 1.32 and continues to trade inside a consolidation range.

    AUSTRALIAN DOLLAR

    AUD/USD moved in a tight range and with a negative bias today as talks about interest rate cut swirl around in the market. The Aussie fell 0.3% against the greenback this week on lower inflation expectations and deteriorating consumer confidence.

    FEATURED CURRENCY

    Paste link in email or IM