We bet on the dollar, despite the highs, the appetite for risk is growing
January 21, 2019 12:24 pm
The dollar continues to hold close to a two-week high against a basket of major currencies, investors’ appetite for risk remains, despite data on a slowdown in China’s economic growth in 2018 to a minimum of almost three decades.
Hopes for a thaw in the trade conflict between the US and China, the Fed’s cautious tone and the likelihood that Britain may avoid the Brexit problem scenario, are boosting investor risk appetite, which fell in December immediately after a collapse in global stock markets. The dollar is still on the road to recovery. In early January, the currency was stuck in a downtrend, but now it is recovering its position against the yen, euro, pound, and commodity currencies.
Potential risk factors for the “American” are negative data on corporate income in the United States and the failure of trade negotiations with the PRC. However, given that trade friction has already put serious pressure on the Chinese economy, there is a high probability that Beijing will make concessions, which means the risk of conflict escalation is reduced.
It is worth noting that, despite the growth of the dollar against the yen by more than 1 percent last week, it began the beginning of the week with a decrease. Even the returning risk appetite did not become a serious problem for the yen, which is becoming more expensive and, according to some experts, it plans to end this year at around 100 yen per dollar. Recall in the US financial markets will be closed on Monday in honor of Martin Luther King Day.
The material has been provided by InstaForex Company – www.instaforex.com
The dollar continues to hold close to a two-week high against a basket of major currencies, investors’ appetite for risk remains, despite data on a slowdown in China’s economic growth in 2018 to a minimum of almost three decades.
Hopes for a thaw in the trade conflict between the US and China, the Fed’s cautious tone and the likelihood that Britain may avoid the Brexit problem scenario, are boosting investor risk appetite, which fell in December immediately after a collapse in global stock markets. The dollar is still on the road to recovery. In early January, the currency was stuck in a downtrend, but now it is recovering its position against the yen, euro, pound, and commodity currencies.
Potential risk factors for the “American” are negative data on corporate income in the United States and the failure of trade negotiations with the PRC. However, given that trade friction has already put serious pressure on the Chinese economy, there is a high probability that Beijing will make concessions, which means the risk of conflict escalation is reduced.
It is worth noting that, despite the growth of the dollar against the yen by more than 1 percent last week, it began the beginning of the week with a decrease. Even the returning risk appetite did not become a serious problem for the yen, which is becoming more expensive and, according to some experts, it plans to end this year at around 100 yen per dollar. Recall in the US financial markets will be closed on Monday in honor of Martin Luther King Day.
The material has been provided by InstaForex Company – www.instaforex.com
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