Category: US

  • Asset Summary – Tuesday, 11 March

    Asset Summary – Tuesday, 11 March

    GBPUSD is exhibiting positive momentum, driven by a confluence of factors favoring the pound. The dollar’s weakness, fueled by US economic uncertainty and tariff implications, is providing a tailwind. Furthermore, the pound is benefiting from expectations of sustained high UK interest rates, as markets anticipate less aggressive rate cuts by the Bank of England than previously projected. Upcoming UK GDP data and the Office for Budget Responsibility’s economic forecasts will be closely monitored for further clues about the UK’s economic trajectory, and may amplify or dampen the current bullish sentiment surrounding the GBPUSD pair.

    EURUSD is exhibiting bullish momentum driven by several factors. Increased government spending commitments in major Eurozone economies, particularly Germany, are fueling expectations of stronger economic growth within the bloc. This fiscal stimulus, coupled with potential joint EU funding initiatives, reinforces the euro’s appeal. The European Central Bank’s recent policy signals, suggesting a potential slowdown in monetary easing, further support the currency. Simultaneously, growing economic anxieties in the United States are weighing on the US dollar, amplifying the upward pressure on the EURUSD exchange rate.

    DOW JONES experienced significant volatility, ultimately closing down 200 points. Initial losses were tempered by news regarding a potential easing of trade tensions between the US and Canada, specifically related to steel and aluminum tariffs. However, the negative impact of declining airline stocks, particularly Delta’s reduced earnings outlook stemming from weakened US demand, weighed heavily on the index. The performance of travel-related stocks such as Disney and Airbnb further contributed to the downward pressure. Investors are now awaiting the upcoming CPI report, which is expected to provide further guidance for market direction.

    FTSE 100 experienced a significant decline, falling to its lowest point in months, primarily driven by escalating global trade war anxieties. New tariffs imposed by the U.S. on Canadian steel and aluminum triggered market uncertainty and negatively impacted investor sentiment. While positive news from Persimmon, regarding increased profits and expansion plans, offered some support, it was insufficient to offset the broader market concerns. Furthermore, slower retail sales growth in February added to the negative pressure, contributing to the overall decline in the index’s value.

    GOLD’s price experienced a significant surge, reaching approximately $2,900 per ounce, a movement largely attributed to a weakening U.S. dollar and an increase in safe-haven demand. Heightened apprehension regarding the U.S. economic future, fueled by escalating trade disputes and presidential comments hinting at a possible economic slowdown, bolstered gold’s appeal as a secure investment. The complex interplay of tariff impositions and retaliatory measures between the U.S., Canada, and China further intensified economic uncertainty. While the Federal Reserve acknowledged these uncertainties, their cautious approach to interest rate cuts adds another layer of complexity. Market participants are keenly awaiting upcoming U.S. inflation data, as this information could significantly impact the Federal Reserve’s future monetary policy decisions, further influencing gold’s price trajectory.

  • Dow Jones Down, Volatility Prevails – Tuesday, 11 March

    US stocks experienced a volatile trading day, particularly in the final hour, influenced by developments in the US-Canada trade situation. The Dow Jones Industrial Average faced downward pressure, while other indices showed signs of recovery. Sector-specific news, such as airline earnings outlook revisions, further contributed to market fluctuations.

    • The Dow was down 200 points.

    The asset experienced a decline amidst a backdrop of market turbulence. Trade discussions and sector-specific challenges appear to have contributed to the downward pressure on the asset’s value. However, the overall market volatility suggests that this decline occurred within a broader context of fluctuating investor sentiment.

  • Dollar Weakens Amid Recession Fears – Tuesday, 11 March

    The US dollar index declined to its lowest level since early November, reaching approximately 103.5. This drop reflects rising anxieties surrounding potential recessionary impacts stemming from the current administration’s trade policies and governmental instability. Safe-haven currencies benefited from heightened risk aversion, while the euro and pound gained strength due to anticipated increases in European defense spending.

    • The dollar index fell to around 103.5, its lowest since early November.
    • Concerns about trade policies and government shake-ups are fueling recession fears.
    • President Trump acknowledged the current economic phase as a “period of transition.”
    • Investors are awaiting CPI and PPI data for inflation insights.
    • The dollar weakened against the Japanese yen and Swiss franc due to increased demand for safe-haven currencies.
    • The euro and British pound strengthened on expectations of higher European defense spending.

    The US dollar is experiencing downward pressure as the market interprets current economic conditions and policy decisions. The confluence of recession anxieties, trade policy uncertainty, and governmental instability is contributing to the currency’s weakness. Furthermore, the increased attractiveness of safe-haven currencies, combined with gains in other major currencies, paints a concerning picture for the short-term performance of the dollar.

  • Asset Summary – Tuesday 11 March, March

    Asset Summary – Tuesday 11 March, March

    GBPUSD: he GBPUSD is likely to remain supported near its recent highs due to a confluence of factors. Dollar weakness stemming from concerns about the US economy and tariffs provides a general tailwind. More specifically, expectations that the Bank of England will maintain higher interest rates for longer are making the pound more attractive to investors, as it implies a higher return on investment compared to other currencies. Upcoming UK economic data, particularly the monthly GDP figures and the Office for Budget Responsibility’s forecasts, will be closely scrutinized and could further influence the pair’s direction depending on whether they reinforce or undermine the current positive sentiment surrounding the pound.

    EURUSD: he recent developments suggest a positive outlook for the EURUSD. The euro’s strength, supported by Germany’s fiscal policy shift and increased defense spending, provides upward pressure on the currency pair. While the ECB’s rate cut is typically a negative catalyst, their acknowledgment of easing restrictive policy, coupled with expectations of only limited further cuts, suggests a controlled and potentially less impactful monetary policy stance. This scenario favors a continuation of the euro’s relative strength against the dollar, potentially leading to further gains for the EURUSD. Traders should monitor upcoming economic data releases and ECB communications for confirmation of this trend.

    US30: iven the information, the outlook for the US30 appears bearish. The decline in US stock futures, coupled with the significant selloff across major indices, particularly in megacap technology stocks which heavily influence the index, suggests a potential downward trajectory for the US30. Growing recession concerns, driven by factors like presidential statements and tariff implications on inflation, further dampen investor confidence. The negative revision of profit and sales forecasts by Delta Air Lines and its subsequent stock tumble highlight concerns regarding economic demand, which could cascade to other sectors included in the US30. Investors should be cautious and consider potential short positions or hedging strategies.

    FTSE 100: he FTSE 100 experienced a significant drop, closing nearly 1% lower, indicating negative trading sentiment. Investor anxiety was heightened by fears of a global economic slowdown, fueled by trade tariffs and President Trump’s recession concerns. Specific sectors, including mining and financials, were heavily impacted, with prominent companies like Entain and Rolls-Royce suffering substantial losses. Overall, the trading day reflected a broad market downturn driven by macroeconomic anxieties and their potential impact on corporate performance.

    Gold: he confluence of factors detailed suggests a positive outlook for gold. A weaker U.S. dollar generally makes gold more attractive to investors holding other currencies. More significantly, growing anxieties surrounding the U.S. economy, fueled by trade tensions and the President’s own statements about a “period of transition,” are driving safe-haven demand for gold, a traditional store of value during times of uncertainty. Despite the Federal Reserve’s cautious approach to interest rate cuts, the underlying economic concerns and the ongoing trade disputes are likely to continue supporting gold prices, with upcoming inflation data potentially further influencing the Fed’s actions and, consequently, gold’s trajectory.

  • Dow Plunges Amid Recession Fears – Tuesday 11 March, March

    US stock futures and the Dow Jones continued to decline on Tuesday as growing recession concerns fueled a sharp selloff at the start of the week. On Monday, the Dow dropped 2.08%, hitting fresh multi-month lows. Megacap technology stocks led the downturn, further impacting market sentiment.

    • The Dow dropped 2.08% on Monday.
    • The Dow hit fresh multi-month lows.
    • Recession concerns are fueling a sharp selloff.

    The text indicates a negative outlook for the Dow Jones, with significant losses attributed to recession fears and a broader market downturn. The decline suggests investors are pulling back from stocks, likely due to concerns about future economic performance.

  • Dollar Dips on Recession Fears – Tuesday 11 June, June

    The US dollar index declined to around 103.7, near a four-month low. Concerns about Trump’s trade policies and potential government instability fueled worries of a possible US recession. Investors are awaiting crucial inflation data releases (CPI and PPI) ahead of the upcoming FOMC meeting, where the Federal Reserve will share updated economic projections. The dollar has weakened against safe-haven currencies like the Japanese yen and Swiss franc, while the euro and British pound have strengthened due to expectations of increased European defense spending.

    • The dollar index is hovering near four-month lows at around 103.7.
    • Concerns about Trump’s trade policies and government shake-ups raise recession fears.
    • Trump acknowledged the current economic phase as a “period of transition”.
    • Investors are awaiting CPI and PPI data for inflation insights.
    • The Federal Reserve will unveil updated economic projections at the next FOMC meeting.
    • The dollar weakened against the Japanese yen and Swiss franc.
    • The euro and British pound gained on expectations of increased defense spending in Europe.

    The scraped text suggests a bearish outlook for the US dollar. Concerns about domestic economic policy and potential recession are driving investors towards safe-haven assets and boosting the value of currencies tied to increased European defense spending. The upcoming inflation data and the Fed’s economic projections will be critical in determining the dollar’s near-term trajectory.

  • Asset Summary – Monday 10 March, March

    Asset Summary – Monday 10 March, March

    GBPUSD: he GBPUSD pair is likely to experience continued upward pressure in the short term. The weak dollar, fueled by US economic concerns and tariff uncertainties, provides a tailwind for the pound. More importantly, the anticipation of sustained high UK interest rates, driven by reduced expectations of Bank of England rate cuts, makes the pound a more attractive currency for investors. Traders should monitor upcoming UK GDP data and the Office for Budget Responsibility’s forecasts as these releases could significantly influence expectations regarding the UK’s economic health and consequently, the pound’s strength. Positive data releases could further bolster the pound, while weaker-than-expected figures may temper its rise.

    EURUSD: he recent developments suggest potential upside for EURUSD. The euro’s stabilization around $1.08, following a significant surge triggered by Germany’s fiscal policy shift and the proposed infrastructure fund, indicates renewed investor confidence. Increased European defense spending further supports the euro, signaling economic strength and stability. While the ECB’s rate cut could have weakened the euro, their acknowledgment of less restrictive policy and hints at a pause in further cuts suggests limited downside, especially considering market expectations of only one or two additional cuts. Overall, these factors collectively create a favorable environment for EURUSD, potentially leading to further gains if the economic stimulus measures prove effective and the ECB refrains from aggressive rate cuts.

    US30: iven the broad market sell-off, exemplified by the S&P 500 and Nasdaq hitting multi-week lows, and the Dow Jones Industrial Average (US30) falling significantly, the near-term outlook for the US30 appears bearish. Concerns over the US growth outlook, highlighted by President Trump’s comments and Fed Chair Powell’s acknowledgment of economic uncertainty, are likely to weigh on investor sentiment. Weakness in key sectors like communication services, tech and consumer discretionary, which have a significant weighting in the US30, further reinforces this downward pressure. The negative performance of megacap stocks, mirroring broader market sentiment, will likely pull the index lower, and traders should monitor upcoming inflation data closely for potential catalysts. The combination of these factors suggests a continuation of the downward trend for the US30 in the short term.

    FTSE 100: he FTSE 100 experienced a slight decline due to a confluence of negative factors impacting investor sentiment. Concerns surrounding the potential economic repercussions of Trump’s tariffs, coupled with fears of a U.S. recession and deflationary pressures in China, created a risk-off environment. Sector-specific headwinds further contributed to the index’s weakness, with a drop in copper prices dragging down Antofagasta, and defensive stocks like AstraZeneca and Reckitt Benckiser facing selling pressure. Declines in the banking sector and profit-taking in defense and aerospace stocks further exacerbated the downward trend, suggesting a broad-based pullback rather than isolated issues.

    Gold: he gold market is currently experiencing a tug-of-war between bullish and bearish factors. Heightened trade tensions, fueled by President Trump’s tariff threats against Canada and ongoing disputes with China, are creating uncertainty that typically drives investors towards safe-haven assets like gold, supporting its high price. However, the Federal Reserve’s current stance of not urgently cutting interest rates, as indicated by Chair Powell, limits gold’s potential gains because gold doesn’t offer interest payments. Investors are awaiting U.S. inflation data, which could sway the Federal Reserve’s future decisions and significantly impact gold’s trajectory. President Trump’s ambiguous comments on the economy further contribute to the market’s nervousness, potentially influencing gold’s demand.

  • Dow Plunges Amid US Economic Jitters – Monday 10 March, March

    US stocks experienced a significant downturn on Monday, fueled by mounting anxieties regarding the US growth outlook. The major indices all suffered losses, with the Dow Jones Industrial Average dropping 380 points. These declines compounded losses from the previous week, reflecting broader market unease.

    • The Dow Jones fell 380 points on Monday.

    The decline in the Dow Jones reflects the broader market sentiment, indicating investor concern about the US economic outlook. Traders are closely watching upcoming inflation data for further clues about the economy’s trajectory.

  • Dollar Plummets Amid Economic Uncertainty – Monday 10 March, March

    The US Dollar is currently experiencing a significant decline, reaching a four-month low of 103.6 on the dollar index. This downturn is attributed to growing anxieties surrounding the US economic outlook and recent comments from both President Trump and Fed Chair Powell acknowledging economic uncertainties. The dollar’s sharpest losses were against safe-haven currencies like the Japanese yen and Swiss franc, indicating increased risk aversion among investors.

    • The dollar index fell to 103.6, a four-month low.
    • The dollar experienced its worst weekly performance since November 2022, dropping about 3.5%.
    • President Trump acknowledged a “period of transition” and didn’t rule out a recession following tariff policy changes.
    • Fed Chair Powell acknowledged increasing economic uncertainty.
    • Investors are awaiting CPI and PPI data for inflation insights.
    • The Fed will reveal updated economic projections at next week’s FOMC meeting.
    • The dollar weakened broadly, particularly against the Japanese yen and Swiss franc.

    The scraped text suggests a negative outlook for the US Dollar in the short term. Mounting economic concerns, coupled with dovish signals from key figures like President Trump and Fed Chair Powell, are weighing heavily on the currency. The increased demand for safe-haven currencies further underscores the market’s risk-averse sentiment, indicating that investors are seeking safer alternatives amidst the current economic climate. The upcoming CPI and PPI data, as well as the Fed’s updated economic projections, will be crucial in determining the dollar’s future trajectory.

  • US30 Headwinds

    Markets describe factors that could negatively impact the US30 (Dow Jones Industrial Average) index. Here’s a breakdown:

    Tariff Threats: The former president’s proposed tariffs on auto, semiconductor, and pharmaceutical imports are a major concern.  Tariffs can increase costs for companies, potentially reducing profits and harming investor sentiment. This uncertainty can lead to lower stock prices.   

    Inflation Concerns: The tariff threats also raise fears of increased inflation.  Higher prices can erode consumer spending power and also hurt company profitability. The Federal Reserve’s focus on combating inflation by keeping interest rates higher could also dampen economic growth, impacting the US30.   

    Geopolitical Tensions: The exclusion of European nations from Russia-Ukraine peace negotiations suggests ongoing geopolitical instability. This uncertainty typically makes investors less willing to take risks, often leading them to sell stocks.   

    Federal Reserve Policy: While the Fed has signaled a pause in rate cuts, their emphasis on controlling inflation suggests they may not cut rates as much as the market anticipates.  Lower interest rates can stimulate the economy and boost stock prices, so the expectation of fewer rate cuts could have a negative effect. The upcoming FOMC minutes are being closely watched for clues about the Fed’s future actions.   

    Mixed Megacap Performance: The slight declines in Apple, Microsoft, Amazon, and Meta, while Tesla and Nvidia remain steady/slightly up, signals uncertainty among investors concerning major companies which greatly impact the health of the index.

    In short, the text paints a picture of potential headwinds for the US30 due to trade tensions, inflation risks, geopolitical issues, and the Federal Reserve’s monetary policy stance. All of these things together point to a likely negative impact to the US30 index.

  • 17 Feb ideas

    GBPUSD Outlook – Monday – 17 Feb 2025

    The weakening of the US dollar reflects market expectations of lower interest rates and easing trade tensions, while currency manipulation remains a key issue in global trade dynamics.

    The GBP’s recent strength is driven by expectations of persistent inflation, cautious monetary policy from the BoE, positive economic data, and geopolitical developments. However, the anticipated rise in unemployment could pose a risk to this outlook. Investors will continue to monitor these factors closely, as they will influence the pound’s performance in the near term.

    – The combination of a weaker USD and a stronger GBP suggests potential upside for the **GBP/USD pair** in the near term. If the USD continues to weaken due to lower interest rate expectations and easing trade tensions, and the GBP remains supported by inflation, cautious BoE policy, and positive economic data, the pair could move higher.

    – However, risks remain:

      – If US economic data surprises to the upside (e.g., stronger growth or inflation), the USD could rebound.

      – If UK unemployment rises more than expected or inflation shows signs of easing, the GBP could weaken.

      – Geopolitical developments (e.g., Ukraine conflict, UK-EU relations) could also impact the pair.

    Conclusion

    The GBP/USD pair is likely to experience upward pressure in the near term due to the contrasting forces of a weakening USD and a strengthening GBP. However, investors should closely monitor key economic data (e.g., UK unemployment, US inflation) and geopolitical developments, as these could shift the balance of risks for the pair.

    Trade idea:

    USD-1; GBP+4; GBPUSD+3; Bullish. Wait for dip (might not reach entry price – Review)

    Technicals: M Bullish; W Bullish; D Bullish; 4H Bullish/Ranging

    Entry 1.2495-1.2525; SL 1.2450; TP 1.2730; Risk 0.3%

    Update Tue 18/02/2025: UK 3M Unemployment rate came in at 4.4% low than the expected 4.5% – Inflationary and Bullish for Pound

    Entry Adjusted an anticipation UK Inflation rate and US FOMC Minutes (Wed), and UK Retail (Fri) to 1.2454, SL 1.2404 TP 1.2743

  • Mixed USD thanks to Trump

    The US dollar index falling below 107 and reaching its lowest level in over two months indicates a weakening of the dollar relative to a basket of other major currencies. This decline is primarily driven by:

    Weak US Economic Data: The unexpected drop in retail sales and signs of cooling inflation (as reflected in the PPI components feeding into the PCE index) have increased market expectations that the Federal Reserve may cut interest rates further. Lower interest rates typically reduce the attractiveness of holding US dollars, leading to a weaker currency.

    Trade Tensions Easing: President Trump’s delay in implementing reciprocal tariffs has reduced some trade-related uncertainty, which can weaken the dollar as investors move away from safe-haven assets like the US dollar.

    Focus on Currency Manipulation: The Trump administration’s broader trade strategy, which now includes examining currency manipulation, could also impact the dollar. If other countries are perceived to be manipulating their currencies to gain trade advantages, it could lead to further volatility in currency markets.

    In summary, the weakening of the US dollar reflects market expectations of lower interest rates and easing trade tensions, while currency manipulation remains a key issue in global trade dynamics.

    How is Currency Manipulation Done?

    Currency manipulation can be achieved through several methods:

    1. Foreign Exchange Interventions: A central bank buys or sells its own currency in the foreign exchange market to influence its value. For example, a country seeking to weaken its currency might sell its own currency and buy foreign currencies like the US dollar.

    2. Monetary Policy Adjustments: A central bank can lower interest rates or engage in quantitative easing (printing money) to weaken its currency. Lower interest rates reduce the attractiveness of holding that currency, leading to depreciation.

    3. Capital Controls: Governments can impose restrictions on the flow of capital in or out of the country to control currency movements. For example, limiting the amount of foreign currency that can be purchased by domestic entities.

    4. Verbal Interventions: Officials may make public statements to influence market perceptions and expectations about the currency’s value, a practice known as “jawboning.”