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1 Apr 2015
USD rally to slow on struggling equities? – KBC
FXStreet (Barcelona) - With interest rates failing to support the USD, investors cautious on stocks, and risk-off sentiment supporting core bonds, the KBC Bank Research Team believes that USD rally might slow down.
Key Quotes
“The focus of markets will be on the US data and on equities. In the US, we see upside risks for the ADP labour market report (consensus 225 000) and the US manufacturing ISM (consensus 52.5). So, in theory, the data could be slightly supportive for the dollar.”
“At the same time, there was somewhat of an inverse correlation between (US and European) equities and the dollar. US equities had a difficult close yesterday evening and are again in the red this morning. Investors are apparently cautious on stocks going into the start of the earnings season.”
“A risk-off context might support core bonds and deprive the dollar of highly needed interest rate support.”
“In this context, further sustained gains of the dollar might become less evident even as the euro isn’t in good shape either.”
“To conclude: there was no clear-cut explanation for the dollar rebound over the previous days and uncertainty on equities might complicate further USD gains. So, in a day-to-day perspective we turn a bit more cautious on the dollar even as we stay positive on the US currency longer term.”
Key Quotes
“The focus of markets will be on the US data and on equities. In the US, we see upside risks for the ADP labour market report (consensus 225 000) and the US manufacturing ISM (consensus 52.5). So, in theory, the data could be slightly supportive for the dollar.”
“At the same time, there was somewhat of an inverse correlation between (US and European) equities and the dollar. US equities had a difficult close yesterday evening and are again in the red this morning. Investors are apparently cautious on stocks going into the start of the earnings season.”
“A risk-off context might support core bonds and deprive the dollar of highly needed interest rate support.”
“In this context, further sustained gains of the dollar might become less evident even as the euro isn’t in good shape either.”
“To conclude: there was no clear-cut explanation for the dollar rebound over the previous days and uncertainty on equities might complicate further USD gains. So, in a day-to-day perspective we turn a bit more cautious on the dollar even as we stay positive on the US currency longer term.”