The Demand for the USD has Returned
Skerdian Meta • 1 min read
The US Dollar was on high demand throughout last week amid negative market sentiment. Although, the sentiment improved a bit on Friday evening as Theresa May accepted to give up on one of the major demands for Brexit, while rumors implied a deficit reduction in next year’s Italian budget.
As a result, the USD lost around 100 pips against the Euro and the GBP on Friday afternoon. The commodity Dollars benefited from the reversal in the sentiment and they climbed around 50-60 pips against the USD.
This morning during the European session, the sentiment improved further, even though we are back to point zero regarding Brexit and the Italian deficit for 2019. The USD was down across the board until a couple of hours ago.
But now, the market sentiment has caught up with fundamentals again and we are seeing a reversal. The stock markets opened with a gap this morning and they pushed higher in the first hour when the European session started, but they have reversed back down now and are down on the day.
EUR/USD and GBP/USD are also down on the day after having given back all of today’s gains and then some more. USD/JPY is around 40 pips higher today, but if the sentiment continues to remain negative, I think this pair will reverse down. So, the demand for the US Dollar is back, hence the buy signal in USD/CAD.