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The USD’s Sensitivity to US Economic News, What is It?

#dollar #cryptocurrencies #bitcoin

$USD $DXY $EUR $BTC $DIA $QQQ $SPY $RUTX $VXX

Tuesday, the .DXY marked at its lowest mark in 2 wks, slipping further in early Asian trading following a 0.4% decliner Monday. The turn comes after it marked a 5-month high on Wednesday of last week.

The JPY continued to recover from a more than 1-yr low near 111 per USD, briefly strengthening back below 109 Tuesday.

The EUR extended its rise from a nearly five-month trough close to $1.17 to trade as high as $1.1821.

The Aussie, a proxy for risk appetite, edged higher to $0.7657 after rallying 0.8% Monday. The Reserve Bank of Australia will announce a policy decision late Tuesday, no change is expected.

The Buck has risen strongly this year, along with Treasury yields, as investors bet on a faster US economic rebound than other developed nations because of massive aid/relief/stimulus and aggressive vaccinations.

But the USD’s fall this wk even after Friday’s much-stronger-than-expected monthly NFPs was followed Monday by the highest reading for services industry activity on record may indicate that much of the Bullish outlook is priced in for now.

The USD mark has now outstripped the pickup in non-US growth expectations, meaning there’s room for the Buck pause in the recent uptrend.

Benchmark 10-year Treasury yields continued their retreat Tuesday, dipping below 1.7% early in the Asian session, from a high of 1.776% last wk,

That happened as the strong economic outlook boosted US stocks to record highs.

USD overall has risen as stocks gained over the past few months. Investors are now watching to see if that relationship may have shifted. As the difficult thing for markets now is to figure out what the USD’s sensitivity is to good US economic news.

This is a Big Q in here because if we are entering a frame where the USD is no longer a safe haven and more of a risk on currency, that is a Big change.

In Cryptocurrencies

Bitcoin firmed following a 2-day gainer to trade at 59,192 Tuesday, closing the gap to the record high at 61,781.83 reached month.

The cryptocurrency market capitalization hit an all-time high of $2-T Monday, according to data and market trackers CoinGecko as gains over the last several months attracted demand from both institutional and retail investors.

Monday in New York the the benchmark US stock market indexes finished at: DJIA +373.98 at 33527.19, NAS Comp +225.49 at 13705.62, S&P 500 +58.04 at 4077.91

Volume: Trade on the NYSE came in at 870-M/shares exchanged.

HeffX-LTN’s overall technical outlook for the major US stock markets is Very Bullish across the board in here.

  • Russell 2000 +14.7% YTD
  • DJIA +9.5% YTD
  • S&P 500 +8.6% YTD
  • NAS Comp +6.3% YTD

Look Ahead: Investors will receive no notable economic news Tuesday..

Have a healthy day, Keep the Faith!

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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