Tuesday, October 17, 2017

Why investors are afraid to bet on a rising dollar?

Why investors are afraid to bet on a rising dollar?

Analysts and investors say that the strengthening of the US dollar should resume, but they are in no hurry to put on any specific terms.

The dollar usually increases against other currencies as the improvement in the US economy compared with other countries, since in this case the rising expectations of further tightening of monetary policy the US Federal Reserve. the WSJ dollar index, reflecting the dollar's value against a basket of 16 currencies, fell by 4% during the first three months of this year, and it was the worst quarter since 2010.

Uncertainty of investors associated with the struggle of countervailing factors that summed up many of them in recent months economic indicators are on the same side of the scales, which are improving, but on the other - the Fed signals that the worries about the global economy may affect its decision to raise interest rates . The question is, will the positive data to restart the growth of the dollar.

"Once investors tried to build on the data, but got hit by the Fed, they are no longer willing to do so", - said Stephen Inglander of Citigroup. According to him, the dollar will eventually rise, but will weaken over the coming months.

Dzheffri Gundlah of DoubleLine Capital, for example, told investors in March that the dollar is likely to trade unchanged or to decline, but in the longer term its uptrend resumes.

On Friday he reigned market uncertainty, as new data painted a positive picture of the situation in the economy. WSJ dollar index rose after the publication of these data, but then declined.

Signals are copied, distributed, and to earn $ https://www.share4you.com/ru/?affid=0fd9105

In March, the number of jobs outside agriculture in the US increased by 215,000, while economists polled by Wall Street Journal, expected growth of 213 000. The indicator of activity in the manufacturing sector point to its increase for the first time since last summer, which boosted confidence in the prospects of of the weaker sectors of the US economy.

At the same time, these indicators should be correlated with the comments of Fed Chairman Janet Yellen sounded on Tuesday. She spoke about the negative impact from the slowdown in oil prices and the fall of China's economy, and this has convinced many market participants that the data - not the only factor that determines the central bank's decision on the timing of further rate hikes.

"Do not underestimate the comments Yellen - said Kvinsi Krosbi, market strategist at Prudential Financial. - Of course, she wants to weaken the dollar against other currencies, as the strengthening of its leading to a tightening of financial conditions. "

And as long as one does not outweigh the scales, it is very difficult to judge the future development of events. Translation PRIME, Dow Jones


No comments:

Post a Comment