Markets on Thursday: The Big Turnaround
As US investors woke, many would have been pretty nervous about what was happening.
As US investors woke, many would have been pretty nervous about what was happening. Equities were pointing towards a 1.5% gap down. China had released a list of products that they were going to be imposing tariffs of their own on. The game of tit-for-tat was on.
As the day unfolded, the White House was proactive and released word that the tariff saga was really a period of negotiation. Nothing was set in stone. That seemed to do the trick and we see equities stage a remarkable turnaround.
Again it was the commodity currencies that benefited. The AUD, NZD and CAD all had some strength. Tariffs from China on US products will be a boost to other major export nations.
At the same time, all the doubt means there is likely to be continued flows in the JPY. A currency that is seen as a safe haven. Although we haven’t seen any real follow-through just yet.
Bitcoin has also managed to fail once again. This time we didn’t hit resistance. There was really just a lack of buying interest, which has been the case for some time now.
A Quiet Dollar
The USD has been relatively quiet throughout the tariff saga. We are still in the tight range of 89.50-90.50 that I’ve been focused on for some time.
As we wait on US employment on Friday, I don’t think we’ll see much more action. If the trade wars can’t spark a move, the dollar must be waiting on other fundamental drivers.
US Dollar Index (DXY)- 240 min Chart.
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