Dollar still on the move to the upside
Glod under pressure thanks to new Fed chairman
US Crude Oil inventory data pushed the WTI lower
Forex
The dollar index extends its bullish gains making five week highs, boosted by an upbeat assessment of the US economy from the FED’s new chairman. The lower than expected second estimate of US GDP for the fourth quarter was not enough to dent the dollar’s rally, indicating that traders may be speculating four FED interest rate rises this year instead of three. Further helping the dollar was a weaker euro that fell to 6-week lows after inflation slowed to its lowest level in 14 months. Having said this, perhaps political developments and Sunday’s Italian election may be the reason behind traders’ scepticism of the euro. GBP sell of worsened following lower than anticipated GDP figures.
Gold
Despite another red day for US equities, a stronger dollar was yet again the dominant force in determining price action for the precious metal. Gold continues to slide as traders speculate that the FED’s new chairman may be more hawkish than Yellen.
Oil
Oil dives 2.2% after US crude stockpiles rise by 3 million barrels compared with analyst expectations for a build of 2.1 million barrels. However, if producers abide to further OPEC output cuts and with the upcoming Aramco IPO, there may still be more ground for the bulls to play with in the oil market.
Cryptocurrencies
Cryptocurrencies lose some of the gains made yesterday with Bitcoin steady around $10700. However, the case for cryptocurrencies is still bullish as adoption increases with Taiwan’s new central bank brief considering using block chain for payments. This dip is likely just the markets taking a breath after what has been a bullish few weeks.
