The Dollar Index Has Updated Local Highs. Trade Conflict Between the US and China Is in the Focus of Attention

Yesterday, the US dollar strengthened again relative to a basket of major currencies. The dollar index (#DX) updated monthly highs and closed in the positive zone (+0.14%). Investors' attention is focused on trade relations between the US and China. The conflict may escalate again. The US President, Donald Trump, said that he did not plan to meet with China's President, Xi Jinping, before March 1, the date before which countries were supposed to conclude an agreement. Moreover, Trump intends to sign an executive order to ban Chinese telecom equipment from the US wireless networks.

The European Commission has worsened the Eurozone's GDP growth forecast for 2019 from 1.9% to 1.3%. According to the European Commission, the forecast is reduced due to the uncertainty regarding the Brexit, as well as a slowdown in the growth of the Chinese economy. Yesterday, the Bank of England said that the UK economy in 2019 could show the slowest growth rate in 10 years. It is also associated with the complex Brexit process and the slowdown of the global economy. The regulator lowered the forecast for the country's economic growth in 2019 from 1.7% to 1.2%. The Central Bank left the interest rate unchanged at 0.75%. At the same time, the Bank of England does not rule out a gradual increase in interest rates in case of a successful Brexit.

The Australian dollar is still under pressure. The Reserve Bank of Australia lowered its GDP growth forecast from 3.25% to 2.5%.

The "black gold" prices have been declining. At the moment, futures for the WTI crude oil are testing the mark of $52.45 per barrel.

Market Indicators

Yesterday, the bearish sentiment prevailed in the US stock market: #SPY (-0.95%), #DIA (-0.78%), #QQQ (-1.34%).

The 10-year US government bonds yield fell. Currently, the indicator is at the level of 2.65-2.66%.

- Report on the labor market in Canada at 15:30 (GMT+2:00).

by JMarkets, 2019.02.08

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.