Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
Greenback might conclude fourth consecutive week up
On Friday, the evergreen buck consolidated its achievements. It’s generally anticipated to conclude the fourth consecutive week in positive territory amid soaring optimism about the prospects for the surge of the American currency in the nearer weeks.
The US dollar index, tracking the dynamics of the greenback against a group of six key counterparts, showed 92.55, which is 0.1% lower than the previous reading, further drifting away from the maximum of four and a half months of 93.42 recorded in Wednesday.
The evergreen buck is ready to conclude the fourth consecutive week in positive territory – it will be the longest series of weekly leaps since the fourth quarter of 2016. For the last month, the US currency has ascended by approximately 4%.
Analysts of Bank of America state that the main catalyst for the surge of the evergreen buck was the lack of improvement in the economic indicators of the eurozone, which made traders open a record number of short positions in the US currency, in particular, against the currencies of developing countries.
According to data on positioning in foreign exchange markets, hedge funds cut the volume of net short positions in the evergreen buck by $10 billion to approximately $18 billion for the week ended May 4.
Trades in the currency markets on Friday are generally calm, with most of the key currency pairs traded in quite narrow ranges.
The common currency managed to strengthen about 0.15% hitting $1.1934, having come down from this year’s minimum of $1,1823, hit on Wednesday.
The evergreen buck remained virtually intact against the Japanese yen, trading close to the 109.28 yen mark having soared to a three-month peak of 110.05 the previous week.
As for the Australian dollar, it got back to $0.7552 having dived on Wednesday to an 11-month minimum of $0.7413.
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Have a look at the key financial instruments on Monday, February 28. Geopolitics is currently on all news frontlines. Western nations escalated sanctions on Russia for the invasion of Ukraine.
The United States will publish the Preliminary GDP on Thursday, May 26, at 15:30 GMT+3.
The Reserve Bank of New Zealand will publish a monetary policy report and make an update on the interest rate on May 25, at 05:00 GMT+3.
The Australian Bureau of Statistics will announce the updated Unemployment Rate and Employment Change data on Thursday, May 19, at 04:30 MT.