The Dollar Index Has Moved from Local Highs

The US dollar is falling against a basket of major currencies amid weak economic reports, as well as a sharp drop in US government bond yields. Thus, the number of building permits issued in June fell to 1,220M instead of the forecasted value of 1,300M. The Fed's Beige Book was also published yesterday, having stated that the growth rate of economic activity in the United States remained modest. The yield of 10-year US government bonds has updated weekly lows. The pressure on the US currency is also put by prolonged trade negotiations between the United States and China. The US dollar index (#DX) closed yesterday in the red zone (-0.19%).

The British pound has recovered some losses against the US dollar. This movement is caused largely by technical factors. Investors have begun to partially fix positions on the pound after a long fall. Optimistic data on retail sales in the UK in June supports the pound. Financial market participants expect new information on Brexit. Earlier, the EU coordinator at the Brexit talks, Michel Barnier, noted that Britain would face serious consequences if it decided to break ranks with the EU.

The single currency has updated local highs against the US dollar. Yesterday, the consumer price index in the eurozone was published, the figure of which was 1.3% in June instead of 1.2%.

Also in the Asian trading session weak data on the labor market in Australia were published. Thus, the level of employment rose in June by only 0.5K instead of the forecasted value of 9.1K.

The "black gold" prices show a negative trend. At the moment, the WTI crude oil inventories are testing $56.65 a barrel.

Market Indicators

Yesterday, the bearish sentiment was observed in the US stock markets: #SPY (-0.66%), #DIA (-0.42%), #QQQ (-0.49%).

The yield on 10-year US government bonds fell significantly. Currently, the indicator is at the level of 2.04-2.05%.

- The number of initial jobless claims in the US at 15:30 (GMT+3:00);
- Philadelphia Fed Manufacturing Index at 15:30 (GMT+3:00).

by JMarkets, 2019.07.18

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.