samedi 14 mars 2015
Dollar Momentum Takes a Life on of Its Own
Posted on 20:06 by nice news
The dollar's advance accelerated since the end of February. The momentum has surprised everyone. Pullbacks continue to be shallow. The move appears to have taken a life on of its own. Consider last week, as the euro slumped more than 3%, sterling more than 2%, and the dollar-bloc more than 1%, US yields fell sharply.
The US 10-year yield fell 15 bp. It has completed retraced the increase spurred by the strong jobs data on March 6. The yield the December Fed funds futures contract fell 7 bp to 51.5 bp. It settled at 49.5 bp the day before the employment report.
The magnitude of the slide in the currencies (leaving aside the yen) has extended the technical condition. If support is to designate the price at which demand is forthcoming, it is difficult to meaningfully discuss technical support when many of the major currencies have not seen these levels in many years.
If resistance denotes where supply is triggered, the technical indicators may be more helpful here. Euro resistance is seen in the $1.0640-$1.0720 area. Aggressive bears may try their hand near $1.0600, partly on ideas that euro bounces remain limited in time and magnitude.
Given the psychological importance of parity (seemingly more so than the other currencies, including the Swiss franc, the Canadian dollar and the Australian dollar), it seems reasonable to expect some profit-taking before parity is seen. A bounce before, say from the $1.0150-$1.0200 area would not be surprising.
Sterling resistance is seen in the $1.4925-50 area. Sterling fell to almost $1.4700. Support is elusive. Bank of England Governor Carney seemed to reverse his earlier signals and encouraged the market to push out when he will deliver the first rate hike. The national election in early May is very much on investors' minds. The polls show no clear outcome, which boosts uncertainty and volatility.
For the first time since 2007, the dollar
The US 10-year yield fell 15 bp. It has completed retraced the increase spurred by the strong jobs data on March 6. The yield the December Fed funds futures contract fell 7 bp to 51.5 bp. It settled at 49.5 bp the day before the employment report.
The magnitude of the slide in the currencies (leaving aside the yen) has extended the technical condition. If support is to designate the price at which demand is forthcoming, it is difficult to meaningfully discuss technical support when many of the major currencies have not seen these levels in many years.
If resistance denotes where supply is triggered, the technical indicators may be more helpful here. Euro resistance is seen in the $1.0640-$1.0720 area. Aggressive bears may try their hand near $1.0600, partly on ideas that euro bounces remain limited in time and magnitude.
Given the psychological importance of parity (seemingly more so than the other currencies, including the Swiss franc, the Canadian dollar and the Australian dollar), it seems reasonable to expect some profit-taking before parity is seen. A bounce before, say from the $1.0150-$1.0200 area would not be surprising.
Sterling resistance is seen in the $1.4925-50 area. Sterling fell to almost $1.4700. Support is elusive. Bank of England Governor Carney seemed to reverse his earlier signals and encouraged the market to push out when he will deliver the first rate hike. The national election in early May is very much on investors' minds. The polls show no clear outcome, which boosts uncertainty and volatility.
For the first time since 2007, the dollar
Dollar Momentum Takes a Life on of Its Own
Categories: Dollar Momentum Takes a Life on of Its Own
Inscription à :
Publier les commentaires (Atom)
0 commentaires:
Enregistrer un commentaire