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Daily market commentary: The US dollar is staging a modest comeback



FOREX

The US dollar is staging a modest comeback, during early Thursday trading, after several consecutive sessions of decline. The greenback’s resurgence is a direct safe haven trade, as cases of COVID-19 close in on 13.5 million globally, with the number of fatalities reaching 600,000. The virus remains a threat to the growth of the global economy, and whenever localised resurgences in the number of cases are reported by the media, investors temporarily seek refuge in safe havens.

Dollar Index

Ricardo Evangelista – Senior Analyst, ActivTrades

OIL 

The oil price has been lifted in the last few weeks by expectations of a quick economic recovery and more recently by the drawdown of oil inventories and expectations for a vaccine against Covid-19.

This morning, despite reductions in cuts by OPEC+ cuts, oil is holding on to $41. From a technical point of view, we are in a crucial phase for the WTI price, which is challenging the resistance zone at $41.50. A clear surpass of this level could open space for further recoveries, while at this stage there is still no clear signal of an imminent correction as “risk on” remains dominant on markets.

Carlo Alberto De Casa – Chief analyst, ActivTrades

daily market analysis

EUROPEAN SHARES 

European shares slid lower on Thursday, mostly in profit taking moves sparked by disappointing Chinese retail sales this morning. Even if trading optimism has recently been boosted by vaccine developments, today’s poor Chinese data underline that market confidence remains feeble and reminded some investors the path to a full recovery may be longer than initially estimated.

Today is set to be a volatile day for EU stocks as investors will scrutinize the ECB’s online press conference where Christine Lagarde is expected to answer questions on the strength and efficiency of the central bank’s emergency bond-buying program.

On the other side of the ocean, stock traders will be waiting for the next tranche of corporate results with Bank of America, Netflix and Morgan Stanley due later today.

CAC 40 daily chart

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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Daily market commentary: The US dollar is staging a modest comeback

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