State of the market: the American dollar maintains optimism after Friday’s growth
At the opening of Monday trades, there is a persistence of risks in the market regarding the growth of the global economy associated with the United States and China trade confrontation and the tightening of the US Federal Reserve monetary policy. At the beginning of the day, a noticeable movement can be seen in currency pairs with the Japanese yen and the British pound. The growth of the yen is caused by increased risks and a decline in stock indices in the Asia-Pacific region, which, despite the positive close of trading on Wall Street, opened the week with a decline. It leds to the resumption of negative sentiment in the market and the flight of investors to safe assets.
The British pound was under pressure at the start of the week on the data that the Brexit talks, despite attempts to force them, slowed down again. The controversial topic of negotiations between the UK and the EU remains the borders of Ireland. Price gaps formed on the currency pairs with the British pound because of the information came out on the weekend.
The US dollar index at the beginning of the week remains optimistic on Friday, demonstrating a restrained positive growth on the correction after the growth, limited to a decrease in the US state bonds profitability and maintaining a downtrend. Finding a support at the level of 95.30, the resumption of risks in the market and the decline in the US state bonds profitability are likely to increase pressure on the American dollar, opening the way for psychological support 95.00.
Read also: “Government bonds as a leading indicator of the foreign exchange market”
Hanzenko Anton
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