Intraday Market Thoughts

USD's Biggest Decline in 17 Months

by Adam Button
Jun 25, 2019 15:21

Three days remaining til the end of the month (and quarter) The US dollar index is posting its biggest monthly decline in 17 months. EURUSD hit a three-month high on Monday and rose above 1.14 to hit Ashraf's target. Gold hit a fresh 6-year in Asia and returns near the highs after a 8% decline in US new home sales. Eatch out for Powell's speech about the US economy at 13:00 Eastern (18:00 London) and dissenter Bullard's speech 6.5 hrs later. The Premium short in USDCAD has been closed at 1.3160 for 200 pip-gain. The latest Premium video is below contains some impirtant mechanics about USD shifts ahead and during Fed rate cuts.

The euro gain to start the week came on a solid IFO survey and continued US dollar weakness. The dollar fell after Treasury yields gave back last week's mini rally. The  US 10-year yields fell 4 basis points on the day and stocks dipped modestly after an early gain.

The Fed's Kaplan argued for patience before cutting rates but also indicated that he was open to looser policy because of rising risks. Trump continued to tweet about the Fed and markets continued to ignore him. His actions on Iran had a larger effect as the White House announced fresh sanctions on Iran. That helped to reverse oil losses and boost it to a modest gain.

Overall moves to start the week were modest but gold has continued to surge, climbing another $20 on Monday. It's on track for the best month since 2016 with an 8% gain. Oil faces resistance at the 59.40 trendline resistance, hence Ashraf's closing of the Premium short in USDCAD at 1.3160 for a 200-pip gain.

Looking ahead, we await Powell's speech at 6 pm London time discussing the economic outlook, where he will surely expound on last week's broad downgrades in US growth. Also important, is St Louis Fed's Bullard speech, where he will surely present his argument for dissenting at Wednesday's FOMC decision, where he made the first dovish dissent in the era of the Powell Fed.

Act Exp Prev GMT
CB Consumer Confidence
132.0 134.1 Jun 25 14:00

Latest IMTs