Greenback victorious as shortened-week draws to a close…
The undisputed champion of this week’s trade is the US dollar. The currency has so far gained handsomely against all its peers, with considerable ground made against the commodity currencies and the euro.
The catalysts have been subtle. There has been no particular data-points or events which have caused a rise in the buck. Simply put, there’s been further recognition that the US dollar is the best of a bad bunch in a global economy which is still growing, albeit it at a much reduced pace.
Many have been asking if the move can continue. The answer is yes. The ‘DXY’ is a trade weighted index tracking the performance of the US dollar against a basket of currencies. This currently stands just above 98. However, after President Trump was elected the index rose to a high just below 104. As you can see, there’s plenty of room for the buck to run.
Today’s trading session is likely to be a volatile one after a busy week for US company earnings, mixed with a couple of key economic data releases, one of which is scheduled for lunchtime today. US Q1 2019 preliminary read will cross the wires at 13:30 and could create a decent amount of volatility through US dollar pairs. Consensus is for a 2% reading, anything above or below would likely be enough to rock markets.
Have a good weekend.
Written by Viv Savani. 9:16am, April 26th 2019
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