- May 8, 2018
- Posted by: Joey Benedid
- Category: Market News
The Dollar Index is continuing to see gains reaching 93.08, the highest levels since mid-December. The Dollar is still seeing support from US Treasury yields as well as broadly stronger economic data that is fueling the expectations on steady rate hikes from the Fed this year. Oil has slipped from its multi-year highs yesterday as Trump is set to announce the Administration’s decision on the Iranian deal, helping further soften commodity linked currencies. Fed Boss Powell said that market projections were well aligned with expectations within the Fed for monetary-policy outlook at a conference in Zurich this morning. China and the US are set to also square off in Switzerland as Ambassador Xiangchen will criticize the proposed US tariffs, while the US will aim to poke holes in China’s retaliation. This is a continuation of the failed dialogue from last week when Mnuchin visited China. EUR is falling to USD strength despite data showing German industrial output rose more than expected for March. Sterling is also seeing weakness as Brexit concerns continue after Theresa May faced another defeat in the House of Lords on her Brexit legislation.
After Powell’s speech this morning, the calendar is quiet until Thursday with the BoE’s Rate Decision and US CPI, and Friday will showcase Canadian jobs numbers. After breaking through resistance during the overnight, short term support and resistance is at 1.2915 and 1.3000 respectively with RSI at 65 and the 200-day moving average ticking up to 1.2764.