The US dollar is almost flat in relation to other major currencies during early Monday trading. The dollar index, which measures the performance of the greenback versus a basket of its peers, lost more than 11% since hitting a multi-year maximum in September. The weakness of the US currency can be explained by the downgraded expectations for how far and how quickly the Federal Reserve will move to tighten monetary policy. With inflation showing signs of stabilization, and recently published data pointing at a slowdown in economic activity in the US, pressure is mounting on the Fed to adopt a more benign stance. Against this background further dollar weakness may occur, especially if US GDP numbers, which will be published on Thursday, confirm the recent trend of slowing down.
Ricardo Evangelista – Senior Analyst, ActivTrades
Stock markets started the new week trading sideways in Europe, with lower volume than usual as traders brace for what is expected to be a quiet trading session.
Without any directional movement so far on equities, the best performances are being registered by the tech sector. Investors are facing lower market liquidity due to bank holidays in both China and Australia, and are preparing for a trading session without any major macro news, apart from the ECB President Christine Lagarde’s speech due later in the afternoon.
Most stock indices still trade inside their bearish flag pattern so far, and the current corrective move may even get further support in Europe as Eurozone shares started suffering from shifting monetary policies from both the Federal Reserve and the ECB. The latest dovish words from Fed officials, significantly contrasting with the increasingly hawkish stance from the ECB, is boosting appetite towards the Euro currency and pressuring large exporting groups from the Eurozone.
The DAX-40 index trades slightly above the 15,050 pts level following a failure to clear the higher bound of its bearish flag pattern. The next support level can be found over the 23.6% Fibonacci retracement level at 14,940 pts while 15,115 pts stays as the first resistance to clear before moving higher.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.