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    USD may be supported by near-term correction of US stock| KOL Forex Analysis•Jasper Lo

    Abstract:The US dollar index (DXY) rose sharply last week in the wake of a drop. According to a previous dovish talk by the Federal Reserve, it will maintain a low interest rate for a long time, for which the DXY fell to 91.746, a two-year low, last week. However, the varying degree of correction in US and global stock markets makes DXY recover from the bottom up with its hedging function. And the US economic data is indeed superior to that of other main industrial countries. For example, from the employment data released by the US last Friday, it is remarkable that the unemployment data of Europe kept increase, resulting in a strong contrast with the US.
    Jasper

      The US dollar index (DXY) rose sharply last week in the wake of a drop. According to a previous dovish talk by the Federal Reserve, it will maintain a low interest rate for a long time, for which the DXY fell to 91.746, a two-year low, last week. However, the varying degree of correction in US and global stock markets makes DXY recover from the bottom up with its hedging function. And the US economic data is indeed superior to that of other main industrial countries. For example, from the employment data released by the US last Friday, it is remarkable that the unemployment data of Europe kept increase, resulting in a strong contrast with the US.

    圖片.png

      In the near term, the US stock may continually affect DXY, that is to say, the divergence between the US stock and DXY will still be maintained. Therefore, if the US stock continues making corrections this week, USD may be supported against all non-USD currencies. It can be seen from the weekly chart that gold, silver, crude oil, etc, all have fallen in the wake of the recovery in USD. Among the non-USD currencies, only CAD survived with a strong trend. So the near-term trend of CAD seems not to be obvious.

      The odds are that the constant correction in global stock markets will affect the AUD and NZD negatively. On the contrary, the safe haven currencies like USD and JYP may benefit from it. Therefore, investors should pay close attention to

      CAD and JPY rather than AUD, NZD and EUR this week. In terms of cross trade, investors should look out for if AUD keeps dropping against JPY.

    圖片.png

      The reason why EUR is negative this week is that the latest economic data indicates a slowing economy in Europe, compared with US economy of high resilience. In addition, European Central Bank official Philip Lane stated that a strong EUR is expected. And the ECB will hold the interest rate decision on Thursday. So it worries traders that the ECB will adopt a dovish measure and even increase the amount of QE following the steps of the Fed, which explains again its dissatisfaction with the status of EUR, putting further pressure on EUR and benefiting DXY directly.

      [About The Author]

      Since 1987, Jasper Lo has been engaged in the financial industry

      (forex, futures and gold) for more than 32 years and holds forex R.O.,

      securities and futures broker licenses. Mr Lo is an expert in trading

      forex, precious metals and commodity futures and an basic and technical

      analyst.

      Over the years, Mr Lo won many individual and team sales champion

      awards, as well as outstanding employee awards. He was invited, as a

      guest mentor, to the University of Hong Kong, Guangdong Ocean University

      and Guangzhou Jinan University. And he was also appointed as the chief

      training consultant by Hantang Securities and Dongguan Securities in

      China.

      Mr Los experience as guest of honor invited by media including Chinese and English newspapers and columnist:

      -Guest of honor invited by TVB New Channels such as Finance Channel, Forex Focus, Global Watch

      -Guest of honor invited by Now Finance Channel - Forex Reports

      -Guest of honor invited by i-CABLE Finance Info Channel - Forex Opportunities

      -Guest of honor invited by ViuTV - Investor Smarter Group

      -Columnist of Finance and Forex Market of Ming Pao

      -Presenter of Finance and Forex Forecast of Ming Pao

      -Presenter of Investment 36 Stratagem and Technical Analysis in 1 Min of Ming Bao Finance

      -Appointed lecturer of Ming Pao Investment Seminar and Paid Course

      -Author of the best seller Investment 36 Stratagem

      -Columnist of Forex Expert, Forex Analyst, Marathon Weekly of ET Net

      -Guest of honor of Open Good Morning of ET Net

      -Guest of honor of Metro Finance Channel - Market Opening, Instant

      Market Fighting, Guangdong-Hong Kong Finance, Finances Power, Market

      Analysis

      -Guest of honor of New Era of Investment of RTHK

      -Columnist of Capital Commodities of Capital Weekly

      -Guest Presenter of Wang Guanyi Online Finance Channel - Fund and Commercial Bond

      -Columnist of Wealthub Finance and Investment Smart Platform of Enrich Culture

      -Guest presenter of Weekly Investment in the World of Enrich Culture

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