Dollar Continues to Crush It
Yellen Confirms her Stance
Banxico Makes the Cut
Please note: All data, figures & graphs below are valid as of November 18th. All trading carries risk. Only risk capital you're prepared to lose.
Market Overview
This is the eighth trading day since it was confirmed that Donald J Trump will be the next president of the United States. Stock markets around the world are still rising on the excitement and the US dollar is in complete euphoria.
The EUR/USD that was fighting yesterday to hold the low of 1.0700 has now broken below 1.0600.
After Abe's trip to Trump Tower, the USD/JPY took a trip to the 110 handle. This pair is currently enjoying its best 2 week stretch since 1988.
Gold couldn't hold itself up anymore and fell as low as $1205 an ounce before bouncing. Gold is taking it from both sides at the moment. The stronger Dollar and the bond market sell-off are giving it a hard time.
Meanwhile, volatility is at its lowest point so far this month with the VIX clocking in at 13.35
Yellen in Tears
The dollar continued to rise throughout Janet Yellen's speech yesterday in which she confirmed that we're likely to see a rate hike "relatively soon."
Yellen fought off questions about her future as the Federal Reserve Chair, stating that she will continue in her role at least until her term is up in January of 2018.
She also maintained her stance that future rate hikes would happen only gradually. This is in stark contrast to what Trump wants. During his campaign, he attacked Yellen for keeping the rates artificially low. So the word 'gradually' in this context is particularly risky business.
Overall, the Chair looked tired. It's as if she hasn't been sleeping much since the elections. 2017 will probably be the most challenging year of her career.
Banco De Mexico
Or, Banxico as it is known locally, decided to raise their interest rate last night from 4.75% to 5.25%. The move came after the Mexican peso was pulverized by the Trump election.
Usually a rate rise tends to strengthen a currency, but as we can see the move actually weakened the peso...
(Remember the chart of USD/MXN shows the dollar, so a move up means a weaker MXN)
This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation.
Past performance is not an indication of future results. All trading carries risk. Only risk capital you're prepared to lose.