Market Analysis

The dollar is hedging down, continuing with its downward movement


The US dollar is hedging down during early Tuesday trading, continuing with the downward movement initiated during the previous session. These losses come after the gains of the previous week, as the markets recalibrate expectations over the pace of the Fed’s policy tightening. Last week’s prevailing sentiment amongst currency traders was that the Fed would accelerate tightening, hiking rates by 50 basis points in March with at least 3 more rises of 25 basis points each to follow before the end of the year. However, since then, Fed officials speaking in public played down such expectations, bringing focus to the unwinding of the balance sheet as a less aggressive way to bring inflation under control. Nevertheless, the dollar is likely to remain supported in the weeks ahead, given the discrepancy between the hawkishness of the Federal Reserve’s stance compared with that of several other major central banks.

Ricardo Evangelista – Senior Analyst, ActivTrades


Source: ActivTrader


European benchmarks edged higher on Tuesday, alongside US Futures contracts, as the “risk-on” trading stance registered yesterday remains. Investors continue to buy the dips almost everywhere this week, with market sentiment boosted by a strong earning season so far where most companies have beaten expectations. Technically speaking, most indices have registered solid rebounds over major support zones and are now challenging key resistance levels. If cleared, these resistances could open the doors to an extended rally, potentially driving prices up to new record highs on the short to mid-term basis. Meanwhile, market operators are likely to stay focused on macro and meso data with the Canadian GDP, the US ISM Manufacturing PMI and US JOLTs figures for December, all due later today. On the corporate front, results from Meta Platforms/ Exxon Mobile and Alibaba will be cautiously monitored by investors.

Pierre Veyret– Technical analyst, ActivTrades


Source: ActivTrader


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