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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (19481)	7/1/2017 1:57:03 AM
From: John Pitera	1 Recommendation Recommended By The Ox Read Replies (1) \| Respond to of 33421

Dollar posts biggest quarterly drop in nearly seven years Fri Jun 30, 2017 \| 3:14pm EDT By Sam Forgione \| NEW YORK The U.S. dollar recovered slightly on Friday, but posted its biggest quarterly decline against a basket of rival currencies in nearly seven years after hawkish signals from foreign central banks this week pressured the greenback further. Investors have ramped-up expectations for *tighter monetary policy from the European Central Bank, Bank of England and Bank of Canada* after hints from officials this week. This has made the greenback less attractive, in addition to skepticism that the Federal Reserve would be able to raise interest rates again this year given a recent batch of weak U.S. economic data and doubts that U.S. President Donald Trump could enact his pro-growth agenda. The U.S. dollar index, which measures the greenback against a basket of six major currencies, declined about 4.6 .DXY percent for the second quarter to mark its steepest quarterly percentage drop since the third quarter of 2010. The euro accelerated more than 7 percent against the greenback for its biggest quarterly percentage gain since the third quarter of 2010. The euro racked up about 2 percent of its gains and the dollar index posted about 1.6 percent of its losses this week alone. The dollar gained about 1 percent against the Japanese yen over the quarter. "What really gave the hawkish central banks extra punch was how it seemed to be a coordinated effort to signal a shift away from low-rate policies," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. He said improving economic growth in Europe and Canada opened the door for those comments and was "a reality check how the U.S. isn't standing head and shoulders above everyone else." The dollar index was last up 0.1 percent at 95.704, while the euro was down 0.2 percent against the dollar at $1.1416. The euro touched its strongest in nearly 14 months on Thursday, at $1.1445, while the dollar index touched a roughly nine-month low of 95.470 early Friday. Analysts said Friday's bounce for the dollar came as some traders likely took profits on gains in the euro as well as the sterling. The dollar fell against the Canadian dollar, however, and was last at C$1.2971 after touching a nearly 10-month low of C$1.2948 earlier. "It appears as though the euro and the pound could be testing some resistance levels, and that could also contribute to ... the profit-taking," said Eric Viloria, currency strategist at Wells Fargo Securities in New York. reuters.com -------------------------------------------------------------- your comment OX, Having said this, the way the currencies around the world have been moving over the past 7 days is pretty remarkable and this "volatility" may be signalling that investors are not as comfortable with the US markets. The strength shown in both the Pound and the Euro since last Wednesday's lows is very impressive!! EDIT- *strength in almost everything vs. the USD says a mouthful ...Peso, etc..*. The USD index -- a 3 year daily chart ... the USD index has yet to make a constructive bullish Momentum divergence with the RSI or the Full Stocastics. And we now seem to have 4 of the 5 largest central banks in the world all in a coordinated interest rate tightening mode.... So it's not like the US is creating compelling positive interest rate differentials that they going to expand upon. The EUR/USD is very strong having taken out 1.1285 -1.1290 resistance that it took it a month to get through , there is certainly potential for further EUR strengthening. the EUR/JPY is also quite strong... No momentum divergence on the RSI... and several downtrend lines and the resistance at 1.24 - 1.26 has been taken out to the upside. If this move in the EUR is suggestive of a "Risk On" condition, it will support the thesis that we should be able to see higher US stock prices on balance through the end of the summer. We have to contend with the short-tend with the short term possibility that the SMH, the FANG stocks, the NDX, NVDA, AAPl and other momentum names are in a correction the past 3 weeks and only half way to the 9 -10% pullback that they are likely to see. Carter Worth has an excellent analysis of the S&P tech index, and how 3 different technical approaches all have the S&P tech index having another 5% or 7% short term correction to finish the move that began with the top on Friday June 9th. 2017 JP