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Daily market commentary: The US dollar recovered some of the ground recently lost to the euro



FOREX

The US dollar recovered some of the ground recently lost to the euro during early Wednesday trading. The greenback’s gains resulted from surprisingly strong American manufacturing data and comments by an ECB board member, who expressed concerns over the strength of the currency and the impact it is having on European stocks. A strong euro, trading above 1.20 to the dollar, has traditionally been seen as detrimental to exports and therefore to the European stock market, so it is natural that there is strong resistance around this level. However, the current outlook still entails dollar weakness and today’s dynamic should be no more than a short-term correction.

Ricardo Evangelista – Senior Analyst, ActivTrades

daily market analysis

GOLD

The US dollar is recovering and consequently gold is losing ground. Bullion’s decline is proportional to the recovery of the greenback, confirming that the current movement is mostly related to what is happening on the currency markets. In other words, the main trend for gold remains positive and a clear surpass of $1,990 and then $2,005 would open space for further rallies. Despite stocks looking strong currently, with US indices at a new historical high, investors are increasing their gold investment as a strategic and defensive asset in case there are new market corrections. Moreover, the strong dovish monetary policy of central banks is another element which is supporting the gold price rally.

Carlo Alberto De Casa – Chief analyst, ActivTrades

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Daily market commentary: The US dollar recovered some of the ground recently lost to the euro

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