Market Analysis

The dollar is losing ground to other major currencies

FOREX

The dollar is losing ground to other major currencies during early Thursday trading. The greenback’s weakness follows the publication of the March minutes of the Federal Reserve’s FOMC meeting, which unequivocally reaffirmed the central bank’s intention to maintain its current dovish monetary policy. For several weeks the foreign exchange markets were dominated by a narrative of inflation emerging from a sudden acceleration in economic activity, which would force the Fed to pivot earlier. However, Fed officials showed they are strongly committed to turbo-charging the US economic recovery, even if such a stance leads to a temporary overheating of the economy; a posture that may create scope for further dollar losses.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

 

OIL

In the last two weeks WTI has moved in a lateral trading range but it appears clear that the black gold has lost momentum. After months of rallying, investors look to have fully priced in recovery expectations after last year’s crisis so for any new rallies to be generated, investors will need some new market drivers. These will probably not come from OPEC+, which has already taken several decisions in the last few months to reduce production. Therefore, for a new jump in the price, we would need more solid data about the economic recovery, especially new positive signals on the demand side. From a technical point of view, the first support zone is placed at $58.30 with a more significant support between $57.20 and $57.50.

Carlo Alberto De Casa – Chief analyst, ActivTrades

 

EUROPEAN SHARES 
European benchmarks are mostly in green territory on Thursday amid a fresh boost to market sentiment provided by yesterday’s reassuring FOMC minutes. Investors’ risk appetite is on the rise again as the Fed officials renewed their dovish tone yesterday by announcing that the massive bond-buying program will continue for “some time”. Moreover, the mood has been further strengthened by Janet Yellen confirming a $2 trillion fiscal aid plan in the US, highlighting the will of both FOMC members and the US administration to keep on doing whatever it takes to sustain the economy. Investors welcomed the news after inflation fears were downplayed by the FOMC and even qualified as growth optimism from investors, which has helped drive stock prices higher today. Miners, carmakers and other energy shares are the old continent’s best performers today with Paris’ CAC 40 the stand out among European benchmarks. The market has unlocked a new upward target towards 6,215-6,220pts after successfully clearing resistance at 6,140pts.

Pierre Veyret– Technical analyst, ActivTrades

Source: ActivTrader

 

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