Daily market commentary: The US dollar index approaches a six-month low


The greenback looks set to close the week on the back foot. The US dollar index, which tracks the performance of the greenback versus a basket of other major currencies, approached a six-month low during early Thursday trading. There has been a revival in risk appetite over the last 24 hours, after the release of positive data, revealing a rise in US consumer confidence, with the upbeat mood in the markets denting the appeal of the haven dollar. Another reason for the dollar weakness is the strength of the yen. The Japanese currency gained almost 4% versus the greenback, after the Bank of Japan announced that it was tweaking the yield curve control on the 10-year bond, a measure that has been seen as the first step towards monetary tightening by the BoJ. It is also worth mentioning the ruble, with the Russian currency dropping in relation to the dollar and approaching a level not seen since April. This debacle comes as the markets weigh the impact of fresh sanctions on Russian oil and gas exports, and with the currency now approaching the important support level of 70 in relation to the dollar, there may be scope for further losses.

Ricardo Evangelista – Senior Analyst, ActivTrades

Daily Market Commentary

European Shares

European markets are set for another bullish trading session after gains were registered shortly after the opening bell on Thursday, extending the trend spotted in Asia overnight as well as on US futures.

This week’s bullish sentiment lingers after yesterday’s reassuring US consumer confidence data and the recent declaration from Chinese regulators, pledging more support to the real estate sector and the overall Chinese economy in general, provided a fresh boost to market optimism towards equities.

This sentiment may change today as key US GDP and employment data loom in the afternoon. A slight increase from 211K to 222K is widely estimated regarding jobless claims while traders don’t expect any significant change regarding the US GDP (2.9%). Of course, any number outside those windows could seriously affect risk appetite, especially as we enter the last significant trading sessions of the year.

The STOXX-50 index has now cleared its first short-term resistance at 3,860 pts, acting now as a support zone for the market, and prices continue their climb towards the next resistance at 3,888 pts / 3,900 pts. This zone is important from a technical point of view (overlap of the last market low + 50% retracement) and the market will probably need major positive macro development in order to register a clearing here.

Pierre Veyret– Technical analyst, ActivTrades 

Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.


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