Thursday, 15 October 2015

King Dollar continues to weaken

Whilst equities saw a second consecutive day of weakness, it was also another day where the USD continued to cool. So far this month, the USD is net lower by -2.7% @ DXY 93.92. Further weakness looks due to the 90 threshold.

USD, monthly

USD, weekly


The USD continues to broadly cool from the March high of DXY 100.72. It would seem the Aug' low of 92.52 will be broken within the next few weeks. From there, it looks a simple run to the 90 threshold.

The bigger monthly cycle is offering price structure of a large bull flag... but underlying MACD (blue bar histogram) is set to turn negative in November. I would be surprised if there is sustained price action under DXY 90.

The implications are rather huge

A great many of the giant international (esp' Dow) companies have been hit pretty hard since the USD began the climb from the DXY 78s in May 2014.

If the USD does see sustained price action under the 90 threshold into 2016, that will really help give earnings a rebound.

Commodities would also likely see some significant upward pressure, notably the precious metals of Gold and Silver, and Oil.

Looking ahead

Thursday will see the usual weekly jobs, CPI, Empire state manu', Phil' fed, and the latest EIA and Nat' gas inventory reports.

*Fed officials Bullard and Dudley are speaking in the morning, and Mr Market will no doubt be listening.

Goodnight from London