The main market drivers
It became known that the EU and the UK representatives agreed on a deal on Brexit. This caused another wave of optimism in the British pound and strengthened the position of the British pound and the euro. At the same time, Brexit risks remain, since this agreement must be approved by the UK Parliament. Which retains certain political risks, which are limited by the lack of time before the final Brexit date.
The US dollar index weakened against a basket of major competitors amid optimism regarding the Brexit deal. Besides the American dollar weakness against European currencies, it also weakened against commodity currencies. The reason for the growth of raw materials was a moderate growth of optimism and the American dollar’s weakness while waiting for the US rates cuts.
The US dollar index updated this August low at 97.50 and accelerated the downward trend in the US dollar index, but was limited by significant oversold. In the future, it will cause attempts of correction. Significant resistance are the marks: 98.00-30, support: 97.50-30.
Fig. US dollar index chart. Current price – 97.80 (10-year US government bonds yield- blue line)
Read also: “The oil market and its cloudy prospects”
Andre Green
Earn with the help of the trade service on the news Erste News!
Topical articles of the trader’s blog:
- What to expect from the Bank of England in the face of a tough Brexit
- The results of the US-China trade talks
- Cloudy prospects for the oil market
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