Daily market commentary: US Dollar index dropped to the lowest point since February


During early Tuesday trading the US Dollar index dropped to the lowest point since February, as investors appear to be buying into the idea that the Fed will shrug aside inflation related worries and stick to its existing policies of low interest rates and generous asset buying programs. The current dollar weakness contrasts with the gains of last week, with the greenback more than 1% down in relation to where it was on Wednesday, when the publication of higher-than-expected US inflation numbers opened up the possibility of an earlier tapering by the central bank. However, Fed officials have since embarked on something of a public relations campaign, never missing an opportunity to dismiss inflation as a mere short-term issue that will soon fade away, and reiterating the central bank’s commitment to let the current dot plot run its course.

Ricardo Evangelista – Senior Analyst, ActivTrades


Bullion is continuing its recovery as the US dollar weakens and investors look to hedge their long positions on stocks with the most classical safe haven. From a technical point of view nothing has changed, with a solid bullish trend for bullion, which just reached the first target we identified in the last few days at $1,870. A clear surpass of this threshold could trigger further recoveries.

Carlo Alberto De Casa – Chief analyst, ActivTrades

daily market analysis


Inflations fears triggered a fall in stocks for less than 48 hours. After this, the dominant scenario went back to the “normality” of the last few months of a risk-on approach to the markets. Combined with a weak dollar, this has been the perfect scenario for further recovery of oil, lifted further by positive data on US stocks. In this scenario Brent pulled above $70, getting closer to the peak of early March, while WTI traded above $66 in a scenario which remains supportive.

Carlo Alberto De Casa – Chief analyst, ActivTrades


Share markets traded higher everywhere in Europe on Tuesday amid resurging optimism towards economic recovery as many countries reopen. Furthermore, investors welcomed reassuring words from Fed Vice Chairman Richard Clarida yesterday as he continued to downplay inflation data, highlighting lingering lack of progress on employment numbers. The trading stance remains bull-oriented so far and investors are ready to seize any opportunity to buy dips on stocks after those words from the Fed and ahead of tomorrow’s extremely busy day where traders will have a lot of data to digest (FOMC, EIA crude oil inventory).  Technically speaking, the DAX-30 index has successfully managed to clear the upper band of its mid-term bearish channel, validating a bullish flag pattern that should trigger a more directional movement towards 15,515 pts and 15,730 pts by extension.

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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