FOREX
The dollar weakened further during early Thursday trading. The markets are reacting to the return of concerns over the stability of the US banking sector, as well as signs of slowing down in the wider economy. A growing number of investors believe the Federal Reserve will be forced to cut rates before the end of the year, in order to avoid a sharper economic contraction, and the more this view gains traction the less support there will be for the US dollar. On the other hand, the euro is on the front foot in relation to the greenback. The single currency touched yearly maximums during the previous session, following the release of better-than-expected consumer sentiment figures in Germany and France. With a 50 basis points rate hike looming next week, the ECB, unlike the FED, still has some ground to cover and more rate increases should follow until midsummer. Against this background, further euro gains will be possible.
Ricardo Evangelista – Senior Analyst, ActivTrades
The dollar weakened further during early Thursday trading. The markets are reacting to the return of concerns over the stability of the US banking sector, as well as signs of slowing down in the wider economy. A growing number of investors believe the Federal Reserve will be forced to cut rates before the end of the year, in order to avoid a sharper economic contraction, and the more this view gains traction the less support there will be for the US dollar. On the other hand, the euro is on the front foot in relation to the greenback. The single currency touched yearly maximums during the previous session, following the release of better-than-expected consumer sentiment figures in Germany and France. With a 50 basis points rate hike looming next week, the ECB, unlike the FED, still has some ground to cover and more rate increases should follow until midsummer. Against this background, further euro gains will be possible.
Ricardo Evangelista – Senior Analyst, ActivTrades