The strong USD rally dominates global markets

Tuesday, November 17, 2015

The strong USD rally continues to dominate the global equity and commodity markets, as the USD index rallied for third consecutive session and extended gains above 99.50 against a basket of currencies. Gold has been hovering around $1,080/ounce while silver has been trading sideways around $14.00-14.50. Copper extended declines towards $4,600 this morning, as the strong USD and bearish copper fundamentals weigh on market sentiment.  

DXY rallies for strong consecutive session towards 100.0

DXY Curncy (DOLLAR INDEX SPOT)   2015-11-17 09-00-08 

Global equity markets rebounded strongly in today’s trading session, as market sentiment improved and risk appetite increased. In Asia, the Nikkei index climbed higher over 230 points (+1.22%) towards 19,650, while the Hang Seng index rallied over 1% towards 22,300. In Japan, housing loans increased by 2.4% in Q3 2015, showing signs of improvement in the country’s housing sector. Japan’s economic minister Amari reported that Prime Minister Abe could order extra budget in the near future but did not specify the amount. 

European equity markets rallied this morning, as the DAX, CAC, IBEX and London equity benchmark indices gained between 1.0% and 1.25% in early trade. However, the euro came under renewed pressure and slid lower towards 1.0600 against the USD. New Car registrations across the main European economies rose marginally by 2.4% m/m in October compared to a 9.6% rise in September. Market participants will be keeping an eye on the release of the German ZEW economic survey regarding the current market conditions.

In the UK, the main focus will turn to the CPI and PPI data. Sterling retreated sharply against the US dollar and fell towards 1.5150, remaining under heavy pressure in today’s session. However, sterling managed to hold the recent range against the euro and climbed above 1.4200.

GBPUSD remains under pressure

GBPUSD Curncy (GBP-USD X-RATE)   2015-11-17 08-59-40  

Events for today:

0930

UK

Oct

CPI & RPI

1000

DE

Nov

ZEW Survey Current Situation

1330

US

Oct

PPI Final

1415

US

Oct

Industrial Production

1415

US

Oct

Capacity Utilization

1500

US

Nov

NAHB Housing Market Index

 

All times UK Local Time

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