13.03.2019: Brexit keeps market in suspense (USD, EUR, Dow Jones, CAD, BRENT)
Traders are keeping the same sentiment on the US dollar despite a positive macroeconomic report from the US. Why did the report fail to provide the greenback with support? What would be good trading ideas under such market conditions? Let’s find out.
According to the US Commerce Department, new orders for durable goods unexpectedly increased in January. So, durable goods orders climbed by 0.4% in January after a 1.3% spike in December. Economists projected the opposite dynamic with a drop by 0.1%.
The welcome news propelled a rally in the US stock market. The Dow Jones Industrial Average is extending a climb. In the early North American trade, the index touched the level of 25,700 points.
At the same time, the US dollar index mirrors investors’ pessimism. Thus, the index that measures the greenback’s value against major currencies is trading lower. It settled down at the level slightly below 96.80 at the moment when this video was prepared.
Traders took notice of negative data. Yesterday traders were discouraged by downbeat data on the US consumer inflation. Today traders found out that US factory inflation is losing momentum. The producer price index inched up 0.1% in February, thus pushing the annual rate of PPI growth down to 1.9% in February from 2.0% in January. The latest figure has been the lowest since June 2017.
Besides, the US dollar has been weighed down by the stronger euro. The single European currency has been gaining ground. It has touched the level it was trading at the moment when the ECB announced its intention to refrain from a rate hike this year. Meanwhile, the euro/dollar pair settled up at near 1.1300. Demand for the euro has boosted amid growing likelihood that the Brexit timing could be delayed. The euro also found support from the news that the eurozone’s industrial sector rebounded in January.
The Canadian dollar is also asserting strength versus its American rival. A steady oil rally is certainly bullish for the Canadian currency. So, the USD/CAD pair fell to 1.3320 where the pair was trading in early March.
Energy investors rush to buy crude oil following a weekly update from the US Energy Department. It again reported contraction in the US crude inventories last week. Brent crude futures try to extend a rally, having climbed slightly above 67 US dollars a barrel.
The action-packed global trading day is not over yet. Investors are monitoring hearings in the UK Parliament. Let me warn you of higher volatility in the market.
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