- Dollar Index Moves Lower as Demand Slips
- Euro and Pound Both Recover Slightly
- Stocks Remain Turbulent to Start Week
The US Dollar forex market had a strong start to the week on Monday, gaining ground on other major currencies as traders opted to move to the safety of the Dollar. This has given way slightly moving into Tuesday as the focus remains on geopolitical issues, particularly Russia and Ukraine. The Euro and Pound have both held steady after mounting a recovery toward the end of trading yesterday. Meanwhile, on Wall Street, stocks took another hit on Monday with the duel threat of inflation, combined with the unpredictability of the political situation causing anxiety on the street.
Dollar Moves Off Monday High
The US Dollar Index has moved into Tuesday in a weaker position having fallen from its two-week high that started the week. The index charts the US Dollar against a basket of other major currencies and had touched close to 96.50 in yesterday’s session. This recent high comes as tensions continue between the US and Russia with many fearing a Russian move into Ukraine.
This idea has been repeatedly dispelled by the Kremlin with news in the second half of yesterday that the country would still be open to seeking diplomatic solutions sending more confidence through the market. For those forex trading, this gave a late boost to currencies like the Euro and Pound trading against the Dollar. Still, there has been a continuation of mixed messages which has added to the market uncertainty and wavering.
Pound and Euro Remain Steady
Despite falling to an almost two-week low with forex brokers on Monday, the Euro managed to rally toward the end of the session to regain the key price of 1.13 against the safe-haven Dollar. Though there is little to stop the common currency from being vulnerable to further fluctuation today based on news, there are several pieces of data including Euro area GDP and employment numbers that can move the market.
As for Sterling, the currency moved slightly lower to start the week but has seen modest gains in early trading as employment numbers came in at the expected number. The ILO employment rate remained unchanged in the three months to December. This figure stayed at 4.1% as analysts had predicted.
Wall Street Volatility Persists
Stocks on Wall Street wrapped up last week with negative numbers on Friday. This downward momentum has carried into the new week with losses again posted on Monday. The Dow Jones finished almost 200 points off where it started the day although it had been considerably lower. The same is true of both the NASDAQ and S&P 500 which both recovered from session lows on Monday.
Heading into Tuesday, the early trading has again been unpredictable though futures on all three of these major indices seem to be taking a more positive line with the Dow Jones rising more than 300 points, and both others gaining more than 1% prior to the opening bell.