Market Analysis

The dollar softened due to positive employment figures in the US


The US dollar softened during early Tuesday trading, adding to the losses of the previous session. After the gains of Friday, which followed the publication of surprisingly positive employment figures, the greenback lost some gas. The markets are now looking forward to the release of the next significant batch of economic data. Tomorrow the latest US inflation figures will be released, in what is likely to be this week’s big moment for the American currency. Current investor expectations factor-in another 75 bp Fed rate hike in September. However, a significant slowdown in the rise of consumer prices could shift the sentiment of the markets and trigger some dollar weakness.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader


European markets slid slightly lower at the beginning of the trading session on Tuesday, as investors assess lingering risks coming from different fronts.

Inflation, geopolitical tensions, monetary policies; a lot of this year’s uncertainty may have already been priced in, but bullish market drivers are still hard to find and there is a high chance there are not enough of them to justify an extended short- to mid-term extended rally or a trend reversal. Even if the reassuring earnings season managed to support market sentiment in July, some investors think this optimism will be short-lived. Equity markets may not have fully priced in monetary uncertainty from central banks, due to the lack of visibility of its long-term impact on growth. Hopes of a less aggressive stance from the Fed vanished following last Friday’s NFP report topping all estimates, while European stock investors are also in a tricky situation assessing the future, as the ECB’s plan to raise rates while still proceeding with asset purchases remains totally unprecedented. Traders are likely to wait and see for further significant macro developments before adjusting their exposure across all asset classes, and some hints may be provided tomorrow with the CPI data from the US and China, the top two economies in the world.

Pierre Veyret– Technical analyst, ActivTrades

Source: ActivTrader


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