Market Analysis

The US dollar is on the front foot

FOREX

The US dollar is on the front foot during the early part of Thursday’s trading session, reclaiming most of the ground lost to the other major currencies on Wednesday. It seems that the markets have now finished processing the slightly lower than expected inflation numbers published earlier in the week and are now shifting focus to next week’s Federal Reserve FOMC meeting, which is expected to deliver more clarity over when the Fed will begin tapering and perhaps even raise interest rates. After yesterday’s tilt to the downside, which may have been the result of investors starting to price-in the higher likelihood of a delay in the move to tighten policies, today the dollar is in greater demand, perhaps reflecting the fact that next week’s meeting could still mark the beginning of the end of the Fed’s gargantuan stimulus.

Ricardo Evangelista – Senior analyst, ActivTrades

Source: ActivTrader

 

OIL

After climbing more than 2.5% on Wednesday, the price of WTI stabilized, even shedding some of those gains during early Thursday trading. Still the outlook for oil prices remains tilted to the upside as fears linger that the reduction in supply caused by the impact of Hurricane Ida in the Gulf of Mexico could lead to further shortages as the Northern Hemisphere winter season approaches.

Ricardo Evangelista – Senior analyst, ActivTrades

 

EUROPEAN SHARES 

Shares traded mostly higher in Europe on Thursday despite another negative session in Asia as short-term uncertainties linger. Even if a surge in crude oil prices helped US markets close higher yesterday, investors’ short-term appetite for stocks remains unclear. Overall, the environment remains bullish for stocks with weaker local currencies and continued support from central banks. But short-term turbulence caused by poor economic data, slower earnings growth, fiscal and regulatory changes in the US and China as well as the prospect of an uneven recovery among nations are denting market sentiment this week. Traders are then likely to rely on what they know with certainty and keep their focus on macro data with today’s US Jobless Claims and Retail Sales in sight. This short-term market uncertainty can also be seen technically on charts with the Stoxx-50 Index continuing its slow dance around 4,200pts.

Pierre Veyret– Technical analyst, ActivTrades

 

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