- May 10, 2018
- Posted by: Joey Benedid
- Category: Market News
The Dollar Index is down for the second day in a row as oil and commodity linked currencies continue to see gains and the US treasury yields fall below the key 3% level this morning. Following weeks of Dollar bulls, the market took a breather as investors look towards inflation figures for the US later today. Rising inflation would support a push for the Fed to raising interest rates sooner and more frequently than expected. Expectations are that US CPI will come in at 2.5% compared to 2.4% from last month. Sterling stumbled as the BoE held rates at 0.5% meeting recent expectations. Soft UK data has changed the outlook for Carney as he stated that any future rate increases are likely to be limited and gradual. In addition to a myriad of soft UK data throughout 2018, life after Brexit is weighing on policy makers and Theresa May continues to encounter resistance for her Brexit legislation within the House of Lords. EUR is quiet, with the only news today coming out of Italy where a coalition government is beginning to look more realistic, which would avoid another election.
US CPI is due out at 8:30am (2.5% vs 2.4%) and to end the week we’ll see Canadian jobs numbers and US U. of Michigan Sentiment. Given recent moves, short term support and resistance 1.2750 and 1.2820 respectively, while RSI has fallen slightly to 51 with the 200-day moving average resides at 1.2644.