The Dollar Index Has Become Stable. Potential for Further Correction Is Still High

Last week, the greenback weakened against a basket of world currencies. The dollar index (#DX) moved away from two-year highs and closed in the red zone. The escalation of the trade war raised the expectations for the Fed to cut interest rates this year. The US Department of Commerce plans to review additional sanctions against the countries that intend to devalue their national currencies against the dollar.

British Prime Minister Theresa May confirmed that she would resign on June 7, after three years of attempts to prepare the country for the Brexit. Financial market participants continue to monitor elections to the European Parliament. The press service of the European Parliament noted a record election turnout over the past 20 years. According to preliminary data, pro-European parties are leading in the elections, which supports the euro. The Central Bank of China said it did not expect a persistent decline in the yuan, and warned speculative sellers that they would suffer “heavy losses” if they bet against the currency.

The "black gold" prices have become stable after a significant drop last week. At the moment, futures for the WTI crude oil are testing the mark of $58.40 per barrel.

Market Indicators

On Friday, the major US stock indices showed mixed results: #SPY (+0.23%), #DIA (+ 0.53%), #QQQ (-0.05%).

The 10-year US government bonds yield has moved away from local lows. Currently, the indicator is at the level of 2.32-2.33%.

The news feed on 2019.05.27:

Today the publication of important economic releases is not planned. US and UK financial markets are closed due to holidays.

by JustForex, 2019.05.27

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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