- US Dollar rises against majors and retreats versus some EM currencies.
- DXY heads for fifth daily gain out of the last six trading days.
The US dollar continues to be supported by risk aversion and the change in the tone of central banks around the globe to a more dovish stance. Also today, a rebound in US yields helped the greenback that rose particularly against majors. Tensions across EM currencies eased modestly, excluding the Turkish lira that lost 4% ahead of local elections.
Regarding data, the final reading of Q4 GDP growth was revised lower to 2.2% from 2.6%, jobless claims dropped more-than-expected but housing data failed to meet expectations. “The mood in the financial markets has not improved despite the high-level two-day trade talks between the US and China, which resumed today in Beijing. Aiming to finalize a trade deal by late April, China has committed to open its financial sector mainly to foreign business during today’s summit. On the growth side, fears remained alive: today, the downward revision of the US Q4 2018 GDP did not help to ease fears over global slowdown among investors. Meanwhile, Fed’s Clarida signaled that external risks must be closely monitored by the FED for its future policy path, while also hinting that nonconventional monetary policy could be used if necessary“, wrote BBVA analysts.
The DXY peaked today at 97.30, the highest level since March 11. Over the last hours, it has been trading in a range between 97.10 and 97.30, consolidating gains. It is about to post the third consecutive gain, extending the rally that started last Wednesday, since then gained 1.55%. The technical outlook favors the upside while it holds clearly above 97.00. It the DXY rises further above the 97.50 resistance, attention would turn to the 2019 high at 97.71.
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