USD: Cautious stance for the week ahead - Westpac

Sandeep Kanihama FXStreet Contributor

Imre Speizer, Research Analyst at Westpac, suggests that data/events this week validate a cautious USD stance: hourly earnings remain muted, the NFIB survey and JOLTS job ads are cresting.

Key Quotes

“More Fed speakers seem less committed to a hike before year’s end (Harker & Brainard), while Yellen is increasingly hedging on the “transitory inflation slowdown” thesis, noting that certain price reductions “partly” explain low inflation, a change from “significantly explain”.”

“The Russian election meddling controversy continues to escalate in ways that threaten Trump’s pro-growth agenda too.”

“3 months ahead: The USD will struggle to make much headway during the next month or two. Growth and inflation do not warrant a hawkish Fed, and Republican Party struggles over health care reform are a foretaste of likely similar struggles on tax cuts, tax reforms or infrastructure.

Longer term, though, we would not rule out a rebound in the US dollar by year end if the Fed sticks with its tightening path, and US data surprises eventually bottom out.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD trims gains, hovers around 1.1900 post-US data

EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.

GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.