Market Analysis

The US dollar is losing ground this Thursday

FOREX

The US dollar is losing ground on other major currencies during early Thursday trading, giving up some of the previous session’s gains. The Dollar Index gained almost 0.7% on Wednesday, following publication of American inflation data which showed a sharp rise to 4.2% during the month of April, leading some investors to assume that such a sudden increase could potentially force the hand of the Fed into tapering its current dovish policies. However, the relatively limited dollar gains reflect the fact that many in the markets are still listening to the Fed’s officials when they describe the spike in prices as both expected and temporary, and that the central bank has no intention to deviate from its plans to let the current monetary and asset purchase policies run their course.

Ricardo Evangelista – Senior analyst, ActivTrades

Source: ActivTrader

 

EUROPEAN SHARES 

Shares traded lower from Frankfurt to Milan following Wednesday’s surprising US inflation report that sparked concerns the Fed may take too long to mitigate the pressure brought by rising prices. Traders will now be waiting for speeches from a batch of FOMC members at the end of this week to assess whether the Fed still has the situation under control. Even though some Fed officials passed off the recent spike in inflation as “transitory”, most market operators see it more as a new trend rather than an occasional event, which is likely to continue putting pressure on stock markets. While growth stocks like tech companies have seen the biggest drop, energy shares have been the most resilient ones so far. Market sentiment remains supported by the prospect of economies fully reopening and travel restrictions being, especially on the old continent. Switzerland’s SMI-20 Index is the most resilient benchmark with the price still above 11,000pts following a rebound from the lower band of its bearish channel.

Pierre Veyret– Technical analyst, ActivTrades

Source: ActivTrader

 

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