More Downside for the US Dollar?Posted 03/02/2018 11:14AM CT |
US Dollar: To no surprise, the dollar has extended to the downside overnight and looks to be poised for a series of declines moving forward. Heading into the US trade this morning, it is the world against the US. So far, the reaction to the tariff announcement has been from trade partners outside of China, but the reaction from China is probably set to extend on several unrelated commodity sectors. The US saw slightly better than anticipated data on Thursday and University of Michigan sentiment is anticipated to jump as well, but we doubt the currency markets will focus on classic macroeconomic developments going into today’s trade. Near-term support comes in at 8970 with resistance at 9060.
Euro: The adversity in the USD will clearly benefit the euro moving forward, even if the strong response from EU officials on the trade issue could hold back the euro as European officials are typically more vocal. Unfortunately for trader bullish the euro, strong euro zone producer price results are largely offset by a contraction in German retail sales. As with the USD, we don’t see classic macroeconomic developments being too important today.
US Dollar Index Mar ’18 Daily Chart