American Dollar on the roll
07 February 2023
Monday definitely belonged to the American Dollar. The USD strengthened across the board, recording the third bullish day in a row. In the past three trading days, sellers managed to erase gains from the previous 17 trading days on the EURUSD. The scale of the correction on the USD is really significant but it still does not change the long-term sentiment which remains negative.
Today, however, the USD is not the strongest currency anymore - another Dollar is, this time from Australia, and the reason is a hawkish stance from the RBA. A few hours ago, we got an expected 25bp rate rise but what was more important was the statement from the RBA. They admitted that the inflation is higher than expected and that higher rates would be needed to ensure that the inflation returns to the target between two and three per cent.
Today’s calendar has two more gems in it. The first one is a speech by FED’s Chairman Powell and we can’t wait to hear his comments on the outstanding Friday job report. Half an hour after Jerome Powell, we will also hear a speech by the BOC Governor Macklem.
Indices were mostly bearish yesterday but the scale of the drop was not scary. Futures start Tuesday mostly on the green side of the market. The mid-term bullish sentiment is still alive and doing pretty well. It is worth noticing that oil stopped falling, even despite the stronger USD. This brings a bit of hope but the dominant sentiment is still negative.
Earnings season is still here and we just found out the numbers of a big oil player – BP, who posted their record 2022 earnings. They thus join other energy giants posting their record earnings like Exxon Mobil, Shell, and Chevron. This might then at least partially explain why we pay so much for petrol, right?