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The euro continued its advance versus the US dollar on Monday, January 15, while American banks are closed because of the Martin Luther King Day. EUR/USD rose almost to 1.2300. The single currency’s gains are fueled by the expectations that the European Central Bank will tighten its monetary policy this year. This together with the diminution in the euro area’s political risks draws a lot of investors to the region. In turn, speculation that other central bank may move towards reducing monetary stimulus is negative for the US dollar.
Japanese yen has also been strengthening versus the greenback. USD/JPY is tumbling to the south. The pair slid to the lowest levels since the middle of September below 110.80.
EUR/USD and Dow are going line-in-line to the north. Dow Jones 30 futures opened with a gap up at 25,896. It’s necessary to point out that Dow Jones Industrial Average index is at the record maximum. The S&P 500 futures also rose to all-time high of 2,797. The decline of the USD and the US tax reform create a positive environment for the US stocks. In addition, the United States has recently published some decent economic figures. According to the data released on Friday, US retail sales showed confident growth of 0.4% in December. That surely added to investors’ optimism and encouraged them to buy stocks.
One other reason why American equities performed extremely well last week is that energy shares soared amid rising oil prices and optimism about corporate earnings. This week 28 companies listed on the S&P 500 are to report their financial results. Analysts say that tax reform makes it more difficult to analyze earnings reports.
Among other things ahead, note that the US Congress has to pass a spending bill until January 19. Otherwise, a government shutdown will happen. American lawmakers managed to avoid the crisis just before Christmas as they extended the deadline for a few weeks. This time, Republicans and Democrats have to agree on some deal. However, it seems that, for now, the parties have many sources of contention.
On Tuesday, European equities went down, with financial institutions weighing a lot on fears about decelerating economic surge, Italy’s budget, receding earnings momentum, to say nothing of a lower probability of rate lifts in the EU in 2019…
On Tuesday, Asian equities declined, extending steep losses on Wall Street because technology companies bore the brunt of fears about decreasing demand, while the evergreen buck dipped after poor American data further affected confidence in the US dollar…
On Monday, American futures generally declined because Apple equities were affected by fears of decelerating demand for iPhones, and new signals of a potential escalation in the China-US trade conflict also contributed to market jitters…
Safe havens such as gold and Japanese yen declined as investors sentiment was boosted by eased geopolitical tensions…
On Tuesday, the euro tacked on because market participants waited for reports on inflation and growth in the euro zone, while the Japanese yen went down after Japan’s major bank told it would be more flexible in its huge stimulus program…
On Tuesday, the evergreen buck dived because the common currency bounced off and the UK pound managed to ascend to the day’s maximums reacting to reports that British Prime Minister Theresa May is going to take control of Brexit talks…
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