What’s happening with the dollar?
The dollar continues to behave as a barometer of the markets’ risk appetite and, to some extent, of the presidential mood. Yesterday, the greenback rose as anxious investors sought safety, reacting to President Trump’s latest episode of governing by Twitter, when he expressed his wish for the ongoing stimulus talks between Democrat and Republican lawmakers to be stopped until after the presidential election. Today, the dollar lost some of the ground gained yesterday due to an increase in risk appetite, as Donald Trump appeared to have a late-night change of heart, tweeting about the need for financial support for struggling families and businesses.
Ricardo Evangelista – Senior Analyst, ActivTrades
European indices ticked higher on Wednesday, continuing the trend registered in Asia overnight, as investors’ risk appetite accelerates. The fact that President Trump has said to be in favour of alternative stimulus measures as well as a new support plan for the airline sector is boosting market sentiment and offsetting this morning’s disappointing German Industrial Production data for August. However, traders are likely to face another volatile trading session today with ECB President Christine Lagarde speaking at a conference in Paris as well as minutes from the last FOMC meeting due later today. In addition, investors will also keep their focus on the US with the first vice-presidential debate where more details are expected on the economic and international position of a potential Biden administration.
The Stoxx-50 Index is now trading inside its major resistance zone between 3,220pts and 3,240pts where a clearing could unlock an extended rally towards 3,300pts, 3,350pts and ultimately 3,395-3,400pts. A failure under this level would drive the price back to 3,145pts and 3,050pts very quickly.
Pierre Veyret– Technical analyst, ActivTrades
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