Against a basket of currencies, the US dollar struck an 8-week high on Tuesday after US lawmakers reached an agreement on border security funding and as hopes build for a breakthrough in US-China trade talks.
US dollar optimism continues to be the dominant theme in markets.
Reports on Tuesday indicating that a further US government shutdown would be averted were “good news for the markets,” Art Hogan of National Securities told CNBC. That “good news” translated into a US Dollar Index rate of 97.2—the highest since mid-December.
Per reports, Democratic and Republican negotiators have finally struck a deal to finance the construction of a barrier of sorts (not the concrete wall President Trump had demanded) along the US-Mexican border, although the agreement still needs to be approved by Congress.
On trade talks, negotiating teams from Washington and Beijing will meet this week in an effort to reach terms on a mutually-acceptable deal. Trump has previously threatened to increase tariffs on $200 billion worth of Chinese goods to 25 percent, from 10 percent, if Beijing doesn’t offer sufficient concessions by March-1. Tariffs on this scale would do serious damage to investor confidence and might even spark a global recession, analysts believe.
Speaking on the dollar this week were forecasters at the wealth management arm of Citibank, based in Hong Kong. Though they acknowledged upside risks associated with severe risk-off developments, “[dollar] depreciation continues in the medium term.”
“As the Trump fiscal stimulus fades in terms of the delta to economic activity, the US dollar may be undermined,” the Citi team wrote. In addition, “policies elsewhere [in the world] may support other currencies against the dollar.”
Citibank forecasts the US Dollar Index 5 percent lower in 6-12 months’ time at 92.50.
A turbocharged US dollar is likely to be “stronger for longer” after reaching long-term highs against a host of major currencies, including the euro, Swiss franc and Swedish krona.
Last update: 25 Apr, 2019
The RBA has resisted cutting interest rates lower than the record 1.5 per cent, however, this week’s lower than expected inflation data could make a cut inevitable.
Last update: 25 Apr, 2019
The Swiss franc continued its shocking run of form on Tuesday, slipping against the euro to its weakest level in 6 months.
Last update: 23 Apr, 2019
HSBC has reaffirmed its US66¢ year-end forecast for the Australian dollar, thereby signalling an upcoming 8 percent slide in the world’s fifth most traded currency.
Last update: 22 Apr, 2019
WorldFirst World Account – Independent BER Review World Account: A Summary WorldFirst, a market leader in the international payments space, offers a multi-currency “World Account” that allows businesses to hold, send and receive funds in 8 major currencies (GBP, EUR, USD, AUD, CAD, JPY, SGD and NZD). With a World Account, businesses can invoice customers […]
Last update: 24 Apr, 2019