Senior Analyst

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After 2 days packed with action, the tone today is expected to be calmer. In the US we will see the release of housing starts while in out of the Eurozone Inflation data are scheduled to come out. Meanwhile, the Dollar is hovering near a 14-year peak set yesterday.  The Dollar has been on upwards trend since November 8th, the day were Donald Trump was voted president, as his administration is expected to embark on a spending spree and tax cuts which are expected to raise inflation and thus interest rates. At the same time, the FED statement on Wednesday reiterated the intention to raise rates 3 times in 2017 instead of 2 previously expected, something which sparked the Dollar Rally since Wednesday further.

Currencies: EURUSD broke the 1.0458 level and traded at its lowest since 2003, reaching 1.0365. The dollar was little changed at 118.145 yen after surging to a 10-month high of 118.660 the previous day. On the other hand, the Mexican peso strengthened after the country’s central bank on Thursday countered the Fed’s tightening with an aggressive rate hike. Meanwhile, the GBPUSD was little changed today after sinking to a 3-week low of 1.2378 overnight. The USD slightly eased against the Swiss franc after hitting a six-year high of 1.0344 francs on Thursday.

Stocks: Indices rained ground with DJIA closing up 59.71 pts or 0.30%, at 29852.24. The index is still having 20000 in sight. S&P 500 and NASDAQ rose 0.39% and 0.37% respectively as consolidation extended. In Asia, Nikkei reached the highest level since last December. Stocks in Europe also posted yearly highs yesterday while further advance cannot be excluded.

Oil and Gold: Gold prices fell to an 11-month low of $1124 after the dollar sparked rally put pressure on assets priced in USD. Gold is now 17% lower from its peak in July. Because gold does not bear any interest, its appeal diminishes when interest rates rise or are expected to go higher. Oil prices rose today, after being hammered in the last 2 sessions as producers in the Middle Easy were informing customers of upcoming supply cuts as part of a coordinated effort to drain a global glut. Brent crude futures were trading at $54.11 per barrel at 0729 GMT (02:29 a.m. ET), up 9 cents from their last close.

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