The Dollar Index Has Updated Local Highs. Demand for Safe Assets Has Weakened

The US dollar strengthened slightly against a basket of major currencies. The dollar index (#DX) closed in the green zone (+0.15%) yesterday. Speech by US President Donald Trump in the American Congress addressing the nation supported the US currency. He said about the "incredible results" of the economic policies of his administration and the excellent prospects for the US economy. During the speech, he painted an encouraging picture of his presidency in the hope of convincing the Americans to give him another chance in the November 3, 2020 election.

The Chinese yuan has been growing after the World Health Organization (WHO) confirmed that coronavirus could be localized. The death toll in mainland China increased to 490, and the number of confirmed cases rose to 24,324. However, despite the increase in deaths, WHO is confident that the spread of the virus can be stopped, as 99% of infections so far are attributed to China. These reports have weakened the demand for safe assets.

The "black gold" prices have been growing after a protracted fall. Currently, futures for the WTI crude oil are testing the $50.80 mark per barrel. At 17:30 (GMT+2:00), US crude oil inventories will be published.

Market Indicators

Yesterday, there was the bullish sentiment in the US stock market: #SPY (+1.52%), #DIA (+1.43%), #QQQ (+2.29%).

The 10-year US government bonds yield has been growing. At the moment, the indicator is at the level of 1.62-1.63%.

The Economic News Feed for 05.02.2020:
  • - UK composite PMI at 11:30 (GMT+2:00);
  • - UK services PMI at 11:30 (GMT+2:00);
  • - ADP nonfarm employment change in the US at 15:15 (GMT+2:00);
  • - ISM non-manufacturing PMI at 17:00 (GMT+2:00).

by JustForex, 2020.02.05

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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