US dollar still in it

The US Index, which measure the strength of the USD against a basket of currencies, was on the front foot yet again as Donald Trump continues his trade wars. The Index found support at the key 100 level and has since moved sharply up as the USD attempts to resurface as king of the gang. Today’s key data out of the US will either solidify the bullishness going into the weekend with better than expected data giving buyers more confidence or give sellers another opportunity to try and get the USD lower should the figures come in weaker than expected.

 

27-Jan 13:30 US Advanced GDP q/q USDCHF

 

EUR slides despite optimism

The EUR was on the back foot yesterday despite positive comments out of ECB`s Weidmann who viewed the economic outlook for the EU as positive, stating that he expects inflation to gradually approach the ECB`s target. Today’s M3 money Supply y/y figure, expected at 4.9%, which measures the total quantity of Euros in circulation and deposits in banks, and is an indicator of inflation, will either support Weidmann`s statement if it prints higher than expected, which would see the EUR strengthen while a worse than expected figure will see the EUR weaken as markets price in lower inflation expectations.

 

27-Jan 09:00 EU M3 Money Supply y/y EURUSD

 

US equities still on the front foot

The Dow Jones Industrial Average (DJIA) managed to tick higher yet again yesterday after breaking the all-important 20k mark, which it did for the first time in history this week. Equity markets will remain sensitive to news regarding stability in the US and oil markets. Positive news out of the US and stability in oil prices will see equities rise while worse than expected data, implying a slowdown in US growth will see equities fall back as investors adopt a more cautious tone.

 

27-Jan 15:00 US Revised UoM Consumer Sentiment DJIA