The Dollar Continues to Weaken
14 April 2023
Despite the quiet start of the week due to the Easter holidays, it ended with a bang! The calendar was packed with at least three Tier-1 events every day since Wednesday. Yesterday, we received better-than-expected data from the Australian job market, weaker-than-expected GDP from the UK, and a drop in the PPI in the USD.
Today, the most important figure will be the retail sales from the US, which is expected to decrease by 0.4%. Additionally, we'll receive the Industrial Production and Prelim UoM Consumer Sentiment from the US. The mid-term trends seem well established, and it'll be interesting to see if the macro data will allow for them to continue or if we'll see some kind of correction.
So, what are the trends right now? The dominant one is the weaker USD. At the end of the Asian session, EURUSD hit a new long-term high, and USDCAD reached a new low. We can also see strength in the pairs from the Antipodes, especially yesterday when both of them rose by more than 1%. The Euro is also doing pretty well, rising against almost all major peers.
Clear trends are also visible in the indices. Wednesday looked like the first step towards a bearish correction, but Thursday brought us a strong rise and pretty much canceled out the Wednesday drop. Stock traders remain bullish, and indices are currently flirting with the mid and long-term highs.
Regarding commodities, traders have a bullish feeling. Yesterday, Gold managed to set new highs, shy of 2050 USD/oz. Oil had a better Wednesday than Thursday as yesterday, we saw a correction. However, the correction is pretty flat, so a positive sentiment around oil remains.