The dollar surpassed this year’s maximum, then weakened together with shares – Roklen24.cz

After the holidays, the markets are busy, with a high degree of volatility came a correction in stocks, as well as in many currencies. Despite Monday’s strengthening of the much-watched currency pair USDJPY, some investors could bet on further breaking the highs. The resistance held and the currency pair rallied with the dollar, which broke through the 105.00 mark on its index on Tuesday. The dollar did not warm up to this value for a long time and weakened practically throughout Tuesday with moderate returns. Shares, both American and European, also took a big hit.

The dollar index hit its highest level in nearly five months early on Tuesday in response to positive data from the US economy. Meanwhile, concerns over intervention by Japanese officials slowed gains for the USDJPY currency pair, although it posted a decent gain on Monday and came close to a multi-day high. The strength of the bulls was not enough and it bounced off the resistance where the Bank of Japan intervened in the past. Monday’s ISM US manufacturing data showed a sharp rise in prices in the sector, adding to investor concerns about how quickly inflation will fall back to 2%. This report also supports the Fed’s delay in interest rate cuts.

Higher interest rates have done wonders for European banking stocks. Specifically, the European Stoxx 600 index gained 13% in the first quarter. Higher earnings and buybacks supported the sector and offset concerns about future rate cuts. For the first time since 2006, the index has grown for six consecutive quarters. Bankers continue to believe in better results than the market average. Even here, however, the good news did not last long.

The first day of the month looked April Foolish in the form of a bearish candle in the stock markets, unfortunately it was a harsh reality that was confirmed yesterday. The world’s largest indexes took a hard hit, where futures gave us an indication of the direction the largest ETFs will take in the London session. Tesla once again disappointed in deliveries of its electric cars, again falling short of expectations and falling 6%. The main S&P 500 index lost 1%, along with the Dow Jones. Nasdaq and Dax even fell by more than 1.3%. Investors’ eyes will be on Friday’s US unemployment report this week. Tomorrow afternoon will include a number of Fed officials who have their speeches ready.

OUTLOOK FOR TODAY

The dollar is currently traded against the euro at the RoklenFx online exchange at a mid-rate of 1.0770 EURUSD, the dollar index is then at 104.790 points. During the day, the EURUSD rate should range from 1.0708 to 1.0789 EURUSD.

The koruna is currently traded at the RoklenFx online exchange against the euro at a mid-rate of 25.30 EURCZK, and against the dollar at a mid-rate of 23.49 USDCZK. According to our prediction, the exchange rate against the euro should be in the range of 25.29 to 25.42 EURCZK, paired with the dollar from 23.47 to 23.71 USDCZK.

According to the models used, the average nominal exchange rate published by the ECB should with a high probability fall within the mentioned interval. Currency rate predictions are based on a time series model that takes into account not only the previous value of the rate, but also its past volatility. For more accurate determination of future volatility, the factor of publication of macroeconomic data is also incorporated into the model. The model is able to determine when to expect increased or decreased volatility of the exchange rate.

Disclaimer: This article is only informative and does not serve as an investment recommendation according to Act No. 256/2004 Coll., on doing business on the capital market. In preparing this article, the author relied on publicly available sources. Neither Roklen Holding as nor Roklen360 as bears any responsibility for any errors in the text or data.

Source: RoklenFx, Bloomberg, Reuters, Financial Times, ECB, Fed, CNB, CME, TradingView