State of the market: the American is adjusted after a decline

After the Friday data on real estate in the US and a noticeable correction of the US currency on the resumption of optimism, the market continues to have a positive attitude towards the American. Such a move, to a greater extent, is caused by a corrective movement relative to the American and a reduction in short positions on a long weekend in the US due to the celebration of the Presidential Day.

On the other hand, concerns about the growth of the US budget deficit due to tax incentives and subsidies for infrastructure continue to put pressure on the US currency. An additional negative factor could be aggravation of trade relations between the US and China. Thus, the US Secretary of Commerce announced the possibility of introducing a tax on imported steel and aluminum. Despite the fact that these are only intentions, China stated that it will take retaliatory measures. The European partners of the United States are also dissatisfied with this statement, and they are ready to take retaliatory measures.

After such statements, commodity assets turned out to be under pressure, which could not affect the commodity currencies. At the same time, the market continues to show restrained dynamics for strengthening the American, which is limited to maintaining a common downward trend. In the conditions of repulsion of the US dollar index from the level of 88.20, the decline in market activity due to the weekend and the possibility of aggravation of trade wars, further limited growth is possible for the American.

Graph of the US dollar index. The current price is 89.20.

Hanzenko Anton