- Forex Majors Weaken Against Dollar Despite Positives
- Fed Chief Points to Uneven Recovery Concerns
- Markets Make Strong Start to Month
The Dollar forex market has started the week strong and continued to gain ground in the early trading today. This comes despite more positive data and movements from the EU in their vaccine push with the UK also well on track. The Dollar move higher comes on the back of a strong earnings season but notice of a potentially “uneven recovery” in the economy from Fed Chief Jerome Powell. This did not dampen enthusiasm for the markets to kick off the week. The Dow Jones in particular forged ahead with more gains yesterday as traders remained buoyant.
Pound and Euro Both Lose Ground
Those forex trading both the Euro and Pound have felt the weight of the return to the safe-haven Dollar to start the week. With the US Dollar Index also trading higher above 91 points, the momentum at present is clear. This is despite largely positive developments for both the EU and UK that would at many other times strengthen their hands.
In Europe, more countries have continued their relaxation on COVID-19 restrictions as even international travel begins to reopen within planned bubble areas between countries in the bloc with vaccines now becoming available in more widespread fashion. The currency still slid low though toward 1.20 with Sterling moving in a similar manner under 1.40 against the Dollar and not helped by continued pressure on the leadership there.
Powell Rocks the Boat with Recovery Comments
The support of the Federal Reserve for the economic recovery to date has remained watertight. They have not given an inch to any questions such as inflation concerns and have always maintained an unequivocal position of positivity. The first wavering in this stance appeared to come from Jerome Powell this week though.
His comments that the recovery, while being clearly brightened, was slower moving for those in lower paid jobs has been seized upon by many as an indication that an uneven recovery is afoot. This has been the major driver with forex brokers seeing a quick move back to Dollar safety for many in forex. Whether it is an indication of a changing tone, or simply an overzealous reaction from those trading remains to be seen on an otherwise quiet day for key data.
Strong Start for Stock Market
May has very much continued on the current vein for Wall Street with a positive move in the Dow Jones in particular yesterday. Trading has opened quietly today as the market continues to digest strong comments from Warren Buffet on crypto and retail trading with Robinhood in particular.
The NASDAQ has seen some pullback so far this week though with Tesla continuing to lag after beating earnings expectations with buyers taking a breather on the stock and tech stocks leading the losses today as the index trades down more than 1% at the time of writing.