Today, on October 10th, 2014, after a little timeout, the US Dollar resumed its growth amid the Fed’s mood. The rally has all chances to continue.
This idea is supported by the fact that Germany, which is the Eurozone’s biggest and strongest economy, is current seeing an export decline, which only adds fuel to the fire, thereby making investors question the prospects of the European economy and exerting even more downward pressure on the common European currency. The thing is that the consequences of all those sanctions against Russia imposed by the USA and the EU start brining negative consequences to European economies, including Germany.
Mario Draghi, President of the ECB, promises to stimulate inflation to make it hit the 2% target et previously. Still, the German Minister of Finance opposes Draghi, thereby diminishing the effect of structural reforms on economic stimuli triggered all around the Eurozone.
US Unemployment Declines along with German Exports
Yesterday’s final economic reports were the US unemployment report and Bloomberg’s consumer confidence index. While the rate of unemployment in the US is declining (the amount of jobless claims dropped down to 287 000) according to the US Department of Labor, the consumer confidence index increased from 4-month lows up to 36,8 points.
The German export showed the biggest monthly decline since January 2009, thereby losing 5,8% in August. Germany’s leading experts including Ifo, RWI, DIW, expect the German GDP to gain 1,3% and 1,2% in 2014 and 2015 respectively.
Yesterday, US stock indices lost all of their gains made during the previous trading session amid concerns over the prospects of the Eurozone economic growth.
S&P500 lost 2,1%, Nasdaq dropped by 2,0%. This took place on slightly lower trading volume. The indices closed below MA 50
The stock market seems to continue retracing, thereby hinting at higher concerns among investors as they reduce exposure and turn to safe-haven assets.
USD Index Prospects as seen by Masterforex-V Academy
The experts from Masterforex-V Academy report that the mid-term bias is bullish in the market of the USD index. The tendency started from 85.00. The price is currently above Mas 21 and 55 but below 255. A break below the heavy MA may trigger a further rally up to 85,99 and 86,21. Alternatively, a break below 85,50 may give way to 85,31.
