The dollar fell to a one week low on Monday. Investors also questioned whether or not a rally that happened last week had run out of steam, because before that it was at a four-month high. All in all, the dollar has really gained a rise in terms of the US Treasury yields and it has also highlighted the wide interest rate gap as well. This is between the US and the other countries. The surge really was stymied by the US consumer price data and this was all published last week. This really did bring about a lot of doubts and expectations as well. The Federal Reserve have also stated that the rates are going to rise by well over four times in the year 2018.
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The momentum behind the dollar move is really starting to fall and where the market is right now means that it is trying to figure out whether they want to take the dollar even higher or not. It’s important to know that the index fell by well over 0.29% on Monday and this brought the total value down to 92.270. It fell from 93.416 last Wednesday and this is the highest that it has been since the 22nd of December. There are however growing worries about the US deficit and this is projected to blow up to over $1 trillion. This will happen in 2019 and this is due to the government spending way too much money. There have also been a great deal of corporate tax cuts as well. These have all undermined the dollar and there are a lot of concerns as to the current account deficit and what that means. If there is a pickup in productivity then this is unlikely to mean that a USD rally is going to come out on top. The global head of the currency strategy has stated this information and he also wrote a note about it as well, backing the fact that it happened even more. The euro has strengthened and investors have also kept a very wary eye on any political events in Italy ever since. The Italy anti-establishment and even the 5-star movement from the far-right league has been hostile to the EU and there are also plenty of budget rules as well. They have also spent the weekend talking about how they are going to form a new policy program.
A lot of parties and adversaries have stated this from March and this is not likely to affect the next government. The euro has also gained over $1.1991 and this has fallen to $1.1823. This is the weakest that it has been since December and investors are also very focused on speeches by the European banking officials. The speeches as well as the German data all shows that there is going to be some economic growth. Only time will tell if this is the case, so do keep that in mind.