The US Currency Weakened Due to Geopolitical Tension

Yesterday, the US dollar weakened against the basket of major currencies after the US missile struck at Syria. The sentiment of financial market participants slightly improved after Russia, the main ally of Syria, did not respond to the strike. However, investors are still concerned and are monitoring the situation. Also, the US intends to introduce a number of economic sanctions against Russia because the country supports Syria. The US dollar index (#DX) closed in the negative zone (-0.40%) yesterday.

President of the United States Donald Trump accused China and Russia of devaluing currencies. "Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!" the president wrote on Twitter. Thus, relations between the US, China and Russia can get worse in prospect.

At the same time, the fall in the US currency was restrained due to optimistic data on the volume of retail sales. In March, the indicator increased by 0.6%, which is higher than market expectations at 0.4%. Today during the Asian trading session, weak economic reports from China were published. In the first quarter, the country's economic growth slowed to 1.4%, which is lower than the forecasted value of 1.5%. The volume of industrial production in China also slowed to 6.0%, while investors expected the value of 6.4%.

The "black gold" prices are consolidating. At the moment, futures for the WTI crude oil are testing a mark of $66.50 per barrel. At 23:30 (GMT+3:00), a report on the API weekly crude oil stock will be published.

Market Indicators

Yesterday, the bullish sentiment was observed in the US stock market: #SPY (+0.82%), #DIA (+0.84%), #QQQ (+0.76%).

At the moment, the 10-year US government bonds yield is at the level of 2.82-2.83%.

- Reports on the labor market in the UK at 11:30 (GMT+3:00);
- ZEW economic sentiment index in Germany at 12:00 (GMT+3:00);
- Statistics on the real estate market in the US at 15:30 (GMT+3:00).

by JustMarkets, 2018.04.17

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.