US dollar with weekly growth against all major currencies

Over the past week, we have witnessed something that is happening relatively rarely - the dollar has appreciated against all major currencies.
A major part of the appreciation of green money relative to other currencies was predetermined by the rise in interest rates on US bonds, to which the dollar is extremely dependent.
Investors have renewed expectations for further interest rates to be raised by the Fed during the year. The rising demand for more risky assets, on the other hand, has led to further strength for the US currency.
For the last week, the dollar index ended at 90.075 points, or an increase of 0.64%.
Late last week, Fed officials hinted at a further gradual rise in interest rates based on strong economic growth figures.
Fed San Francisco head John Williams said that inflation will rise this year to Fed targets of 2% and will remain above those targets a few years.
In order to protect the US economy from overheating, it is necessary for the Fed to continue raising interest rates, Williams said.
On the other hand, the leader of the Chicago Fed, Charles Evans, said it might be more appropriate to raise interest rates gradually.

Gold with a third consecutive drop

Gold prices dropped for a third consecutive trading session yesterday after the dollar pushed from its three-year minimum in the past week. Investors await the protocols of the Fed meeting later this week for more clarity about the future policy of the reserve.
The spot price of gold fell 0.6%, or its biggest daily decline in two weeks. The noble metal traded at levels of $1 339 per ounce.
Gold futures fell 1.2% to $ 1,340.40 an ounce, marking its biggest daily decline since November 2017.
The dollar index, following the US dollar's performance against a basket of six major currencies, rose 0.5 percent to 89.544 points. It dropped to 88,253 points last week, which was its lowest value since December 2014.
The US currency has shown signs of deprivation after some investors bought the dollar after its record sales last week.
Last week was the best gold for more than five months when the metal added 2.4% to its value as a result of rising US inflation and declining tensions.
The spot price of gold is expected to find strong support at a level of $1,326 per ounce.

Dollar collapsed today

Today, the dollar index DXY (that is, the dollar's rate to the basket of six world reserve currencies) collapsed to the lows that were last seen at the end of December 2014. Since the beginning of this year, the index has dropped by 2.6%. The dollar also lost in value and in relation to each of the world reserve currencies separately, "losing weight" against the euro by 0.75%, to the British pound sterling by 1.4%, to the Japanese yen by 0.8%, to the Canadian dollar - by 0.5%.
The most obvious reason for the fall of the dollar was the statement by US Treasury Secretary Stephen Mnuchin that a weak dollar is supporting the economy. In principle, he did not say anything new, just confirmed the economic pattern that a weak national currency supports production in exporting industries. American exchange speculators reacted "patriotically", because a weak dollar supports the US economy, and speculators from other countries helped the growth of their national currencies.

The dollar is close to its highest levels in anticipation of the ECB

The dollar changed slightly yesterday, sticking to its highest values ​​in two weeks before the decision of the ECB later this week.
The dollar index was traded late last night at 93.94 points. The euro traded 0.1% up against the US dollar, at 1.1760, against its 1.1750 prior day.
This week will be extremely saturated at meetings of central banks. There are decisions about the monetary policies of the Bank of Canada, the Swedish and Norwegian central banks, and the ECB on Thursday.
The dollar has found some support after rising interest rates on US government bonds, with 10-year bonds reaching 2.4 percent.
Data released yesterday about activity in the industry sector showed a steady performance of the US economy this month.

The Fed kept interest rates, slowing down the pace of increase

Fed kept interest rates unchanged, which was widely expected by analysts. However, what became clear from Janet Yellen's statement was that the reserve would likely slow down the pace of interest rate hikes.
What the Fed said about its record-breaking balance was that it would begin to decline "relatively soon". And though it is not clear when it will happen, according to market observers, most probably in the autumn.
The Fed's balance sheet has a record value of $4.5 trillion, and its reduction in practice will mean withdrawing liquidity from the market. Or totally opposed to the redemption of assets, which triggered strong growth for US indices.
The Fed started with its gradual rise in interest rates in 2015, and after just two increases to the beginning of this year, we witnessed two more this year. This led to interest rates between 1 and 1.25%.
Despite the rise in interest rates, the dollar fell against the rest of the major currencies. The dollar index fell by 8% since the beginning of the year.
Market participants are divided in two on whether we will witness another increase in interest rates this year. Half of the respondents are of the opinion that we will see another interest rate rise in December, while the other half think we will see no more increases this year.

The US dollar has almost no chance

The US currency remains under the pressure of sellers, despite the publication of a moderately positive value of the consumer sentiment index from the University of Michigan. Recall that the previous value was at the level of 96.3, the forecast was 97.1, the fact is 97.6. In January and December, this indicator exceeded the 98-point mark. Therefore, I can not say that now we have very good value for it, but I would not consider it a signal for selling the US dollar.
However, at the time of publication of the index, demand for the US dollar declined. Within the first 5 minutes after the release, the US dollar index decreased by 0.1%, moving away from the session high by more than 25 points with the average daily volatility of the US dollar index of 59 points (per month) and 67 points in six months. Accordingly, the risk of further weakening of the US dollar paired with major currencies remains very high.

The dollar moved away from the lows, investors expect Yellen's performance

The dollar took a little breather on Wednesday after falling to a seven-week low against the yen, while investors awaited the speech by Fed's governor Janet Yellen devoted to monetary policy.
The US currency strengthened by 0.6 percent to 113.30 yen after passing the minimum of seven weeks at 112.57 yen. The Japanese currency strengthened seven consecutive sessions.
The dollar index, showing the dynamics of the US currency against six major currencies, amounted to 100.640 points by 5.45 GMT, adding 0.3 percent. On Tuesday, the dollar fell to 100.26 points, its lowest level since December 8.
The euro was down by 0.28 percent to $1.0683, breaking the day before the mark of $1.07195, which is the maximum value from December 8.
In his speech, Yellen on Wednesday may contain indications of the direction of US monetary policy.

The dollar rose on data of the growth of wages in the US

In November, fewer jobs were created in the US labor market than expected, while the unemployment rate rose slightly. However, a significant positive for the market was the news of unexpectedly strong growth in average hourly wages. Against this background, the US dollar continued to strengthen against world currencies.

The US unemployment rate rose to 4.7% from 4.6% recorded in the previous month, as predicted by the forecast.
Meanwhile, average hourly wages rose in December by 0.4% after falling by 0.1% a month earlier. Analysts expected an increase by only 0.3%. As a result, the annual rate rose by 2.9% from 2.5% in November. The dynamics of growth of wages is closely monitored by the Federal Reserve, as an indirect indicator of inflation and evidence of improvement in the labor market.

USD index, which tracks the greenback against a basket of six major currencies, rose by 0.6% to reach 102, compared with 101.67 at the time of the release of data.

The dollar fell after the release of weak ADP report

Dollar drops against the major currencies after data from ADP showed that employment in the US private sector grew in December, much less than expected.
ADP reported that the level of employment in the private sector rose to a seasonally adjusted 153 thousand last month, below the projected increase of 170 thousand.
In November 215 thousand jobs were created.
The ADP report is not considered as an accurate indicator about government NFP data, which will be published today, January 6, but can serve as a reference for market participants.
The EUR/USD after the publication of this news has increased by 0.5% to 1.0540 (by 13:45 GMT).
USD/JPY has fallen by 1% to 116.06.
USD Index, which tracks the greenback against a basket of six major currencies, fell by 0.4% to 102.06.
Previously, pressure on the US currency made published protocols of the December meeting of the Federal Open Market Committee (FOMC) of Federal Reserve, which emphasized on the uncertainty as to the likely impact of the policy of the new administration of Donald Trump on the US economy and the Fed's monetary policy.

The euro rose sharply against the dollar, catching traders by surprise

During the last for the year Asian trading the euro jumped dramatically against the US dollar, which caught traders by surprise, writes MarketWatch.
The cost of the euro flew in a few minutes from a level of $ 1.0490 to $ 1.0700, a maximum of 2 weeks. However, the rate quickly dropped to $1.0517 from $1.0490 at the close of trading prior to the closing of the trading year.
In tandem with the yen the dollar rose to 116.986 yen compared with 116.54 yen at the close on Thursday
The Pound Sterling, Australian and New Zealand dollars also rose to US currency.
The cost of the pound rose to $ 1.2346 from $1.2261 day earlier.
WSJ Dollar Index, which tracks the dynamics of the dollar against 16 major currencies, fell during the trading by 0,5%. The indicator, however, closed the year with increase by more than 3%.

Dollar drops before New Year

On Thursday, the US dollar fell in a weakened pre-New Year trade, retreating from a 14-year high against a basket of currencies, while investors are taking profits in anticipation of the end of the year.
USD Index, which tracks the dollar against a basket of six major rivals, fell by 0.3% to 102.93 (08:40 GMT), after a 14-year peak at 103.62 last week.
The euro rose by 0.3% against the dollar to 1.0446, retreating from a 13-year low at 1.0352 last week.
The dollar fell after data from the National Association of Realtors showed that the number of pending sales in the US housing market fell in November to the lowest level for almost a year, indicating that the housing market may be losing power.

Important week for the dollar

On Friday, the dollar rose against the basket of major currencies against the background of increased expectations that the Fed this week will raise the interest rate.
On Friday, the USD index, which shows the relationship of the US dollar against a basket of major currencies, rose by 0.48% to 101.60. For the week the index rose by 0.75%.
The market as never is sure about raise rates for the first time in a year on Wednesday. According to various forecasts investors assess the probability of rate hike to 100%.
The dollar is growing steadily on expectations the US central bank rate hikes, the currency becomes more and more attractive to investors.

The US dollar has updated a 14-year high

The dollar rose against other currencies on Wednesday, as the release of upbeat US data on orders for durable goods added optimism about the US economy and increasing rates in the US, which is expected next month.
The US Department of Commerce report said that orders for durable goods rose 4.8% last month, surpassing expectations for an increase by 1.5%.
Basic orders for durable goods (excluding transport) have increased in the last month by 1%, much higher than the forecasted increase of 0.2%.
On a less positive note, there was a report the US Department of Labor, which showed that the number of initial applications for unemployment benefits for the week ended November 19 increased by 18,000 to 251,000 from 233,000, recorded in the previous week (initially 235,000). Analysts had expected, that the number of applications will increase by 15,000 to 250,000 last week.
The dollar was supported against the background of expectations that the presidency of Trump would increase budget spending and tax cuts, which, in turn, will contribute to the acceleration of economic growth and inflation.
Accelerating economic growth and inflation will allow the Fed to continue tightening of monetary policy.
Dollar rally was also triggered by rising expectations that the US central bank will raise rates at the meeting on 13-14 December.
Late last week, the chairman of the Federal Reserve Board of Governors Janet Yellen said that the rate increase "is expedient in the near future."
The EUR/USD fell by 0.50% to a new 11-month low at 1.0546.
USD index, which shows the relationship of the US dollar against a basket of major currencies, rose by 0.49% to 101.59, updating the 14-year high.

Strengthening of the dollar threatens the financial stability

A representative of the Bank for International Settlements said, that there are risks of strengthening of the US dollar for the global financial system.
Head of BIS research department noted that the dollar replaced the CBOE Volatility Index as an indicator for risk appetite.
According to him, the appetite for risk decreases as the strengthening of the dollar. Shin also claims that the strong dollar is not beneficial to anyone.
Strengthening of the US dollar led to a disproportion between the interest rates on the market.
On Tuesday, the dollar index exceeded 100 points, but later dropped.
On the US dollar exchange rate today will affect the performance of 6 Fed members at various events.

Dollar at 8-month peak on expectations the Fed raising rates

The dollar rose on Monday to a new eight-month high against major currencies, supported by expectations of raising interest rates before the end of the year.
The dollar index, which tracks the US currency against a basket of six major rivals, rose by 0.1 percent to 98.718, after rising up to the level of 98.846, its highest level since February, 3rd.
Last Friday, the head of the Federal Reserve Bank of San Francisco John Williams repeated his appeal for rapid increase in Fed rates, telling reporters that "this year eligible" for the tightening of monetary policy.
His comments were preceded by "hawkish" statements and other central bank officials, including the president of the Federal Bank of New York William Dudley and Fed Vice Chairman Stanley Fischer.
Quotations of futures on the federal funds rate show that the market assesses the likelihood of Fed rate increase in December to 70 percent.
The dollar also received a support by a recent poll, according to which US presidential candidate from the Republican Donald Trump loses against representing Democrats Hillary Clinton on the eve of the elections on 8 November.
The euro weakened by 0.1 percent to $ 1.0874, approaching Friday's low of $ 1.0857, the lowest level since March 10.
Against the Japanese yen the dollar gained 0.1 percent, rising to 103.86 yen.
Published on Monday data showed that Japan's positive foreign trade balance in September is at the level of 498.3 billion yen ($4.8 billion) against the average forecast of 341.8 billion yen.
Offshore yuan, trades in which are held outside of mainland China, updated six-year low against the dollar after weakening of the yuan in the market of mainland China on the background of the growth of the dollar index.

The USD/JPY reached 3 weeks maximum against the background of official comments about the Fed rate

The dollar rose to a peak of three weeks against the yen on Monday, as comments by the US Federal Reserve strengthened expectations of interest rate rise in the near term.
The yield on US government bonds rose to the highest levels since June, and interest rate futures indicated that the probability of a rate hike in September exceeded 30 percent, compared with 18 percent before the speech of Fed Chairman Janet Yellen and her deputy Stanley Fischer, showed FedWatch data from CME Group.
The dollar on Monday rose by 0.5 percent against the yen to 102.39 yen, the highest level since 9 August. By 12.00 GMT the dollar strengthened by 0.42 percent to 102.25 yen.
The dollar index against a basket of major currencies grew by 0.19 percent to 95.752. Euro fell by 0.24 percent to $1.1168.
Speaking at the three-day symposium of central bankers in Wyoming, Yellen said, that the probability of a Fed rate to be increased in recent months due to improved labor market indicators and expectations of moderate economic growth has rose.
Yellen did not specify when the US Central Bank may raise rates again, but her deputy, Stanley Fischer, said, that the Fed chairman speach on Friday met the expectations of the likely increase in interest rates this year.

Euro will not go much higher - technical view

The dollar index, reaching down to the support of 94 p., and pushing away from it, still looks like a correction after a sharp peak and like a closing of the weekly short positions.
EUR/USD moved from 1.1360 - weekly maximums.
However, it serves as a correction because the pair has not reached the significant resistance. Now the pair is in the middle of the trading range 1,1220-1,1420. And technically the uptrend may reach the upper limit. This zone, approximately at 1.1425, may stand as a very strong obstacle for a growth. In this level stands the price reversal down, caused by the referendum in the UK, and here is the pulse point of the downward trend. Therefore, it makes sense to consider selling with target 1,1225-1,12 when reaching the zone.
Conversely, in the case of approaching the support of 1,1225, EUR/USD may turn up from the broken trend line. Only consolidation below this boundary will provide the technical possibility of a further weakening of the pair to 1.1130.
Obviously, the closest strong driver may be a performance of Janet Yellens at the Fed conference in Jackson Hole on 26 August. Prior to this, the most probable is the side, range of movement of the pair.
In general, I keep my "bearish" view on future prospects for the euro. Therefore, deals from these levels are preferred.

The dollar fell after weak economic data from the US

The dollar fell on Friday after US data unexpectedly indicated that retail sales in the US have not changed in July, while the producer prices fell, triggering fears about economic growth in the third quarter.
Economists forecasts for retail sales were for growth by 0.4 percent. The decline in producer prices was the first since March and the strongest since September 2015.
"Retail sales data in the US is particularly strong pushing down the dollar", - said Nick Bennenbrek from Wells Fargo Securities in New York.
Dollar slowed down by 0.46 percent on Friday night to a basket of major currencies, falling to 95.254, at least one week. The dollar also lost 0.9 percent against the yen to 101.00 and 0.6 percent against the euro, to $ 1.1201.
A week ago, the US currency has demonstrated rally after data, which pointed stronger job growth in July than forecasts, reinforcing expectations, that the Fed will raise rates this year.
However, this week, the dollar lost its advantage, as investors hardly expect a rate hike in September, and the December's meeting of the regulator is still far.
The Australian dollar rose by 0.3 percent to $ 0.7714 after falling to $ 0.7671. The New Zealand dollar gained 0,5 percent to $ 0.7249, before falling to $ 0.7186.