Boris and Kathy Forex Weekly – 08-04-2019 – Commodity Dollars
April 8, 2019 12:30 am
Investors are buying US dollars for a very different reason this month. In March, concerns about global growth, a pullback in stocks and an inverted yield curve led investors into the safety of the greenback but as we kick off the second quarter, some of those concerns faded driving US equities to fresh year to date highs. Although it is far too soon to say that the rally will last, nothing seems to keep the greenback down. This largely has to do with the fact that while the US economy is slowing, it is outperforming its peers. Easing is also not on the table for the central bank despite President Trump’s call for rate cuts and quantitative easing. While all of the major currencies lost value against the US dollar, New Zealand’s currency was the worst performer. The central bank’s view that a rate cut is more likely than a hike continues to weigh on the currency.
Investors are buying US dollars for a very different reason this month. In March, concerns about global growth, a pullback in stocks and an inverted yield curve led investors into the safety of the greenback but as we kick off the second quarter, some of those concerns faded driving US equities to fresh year to date highs. Although it is far too soon to say that the rally will last, nothing seems to keep the greenback down. This largely has to do with the fact that while the US economy is slowing, it is outperforming its peers. Easing is also not on the table for the central bank despite President Trump’s call for rate cuts and quantitative easing. While all of the major currencies lost value against the US dollar, New Zealand’s currency was the worst performer. The central bank’s view that a rate cut is more likely than a hike continues to weigh on the currency.
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