Markets on Monday: The USD Rallies, but Tariffs Loom
Markets were active on Friday thanks to a better than anticipated US jobs report. The USD led the way, again putting the majors under pressure.
Despite the strong jobs report, that saw a better than anticipated headline number and solid wage growth. Markets were still concerned about the trade wars. And rightfully so.
Over the weekend Trump suggested that he could slap tariffs on the entire volume of Chinese exports into the US. More than $500 Billion in total.
So as the week unfolds, we will be looking to see how markets react. Wall Street was already down on the fears and that appears to be leading into a lower open in Asia.
The headline numbers this week for the USD are retail sales, PPI and CPI so again it should be an active week on markets.
The USD is Grinding
The DXY is still hovering around the support turned resistance level at 95.50. To move higher that level will need to break and we will want to then see a higher low put in place.
With the trade fears the USD is making for a tricky trade at the moment. We have different market forces pushing it around and that is probably why we are stuck where we are at the moment.
Monday will be important to gauge sentiment after Trump’s latest threats.
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