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Currency

Forex Trading Alert: USD Index at Fresh Lows

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Posted by Nadia Simmons - Sunshine Profits

on Friday, 03 February 2017 11:23

Forex Trading Alert originally published on Feb 2, 2017, 8:14 AM

Earlier today, the USD Index extended losses against the basket of the major currencies as yesterday's Fed statement didn't give clear signal on the timing of its next rate hike. How did this drop affect the technical picture of EUR/USD, USD/CAD and AUD/USD?

In our opinion, the following forex trading positions are justified – summary:

EUR/USD: none
GBP/USD: none
USD/JPY: none
USD/CAD: none
USD/CHF: none
AUD/USD: none

EUR/USD

43615 a
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Currency

Trump seems determined to punish the U.S. dollar

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Posted by Mark DeCambre - MarketWatch

on Thursday, 02 February 2017 07:32

MW-FE890 trump  20170201091243 ZHThe dollar unraveled in January and some see more declines in its future

On Jan. 17, currency traders pushed the dollar lower after Trump expressed concern about the strength of the currency, describing it as “too strong,” considering where currencies like China’s yuan USDCNY, +0.0058%  and the Japanese yen USDJPY, -0.69%  were trading. Yesterday, Trump’s National Trade Council head, Peter Navarro, in an interview with the Financial Times (paywall), sparked a sharp rise in the euro USDEUR, -0.3446%  versus the dollar. 

The action prompted Steve Barrow, currency and fixed-income analyst at Standard Bank in a Wednesday note to forecast that the roller-coaster ride for the buck would likely end with greenback significantly lower at the end of Trump’s tenure in the White House. Barrow predicts a 10% near-term rise for greenback followed by “a multiyear downtrend that sees this entire rise, and much more, reversed as we head towards the next election.”

...continue reading HERE

....related: Trump is waving adios to the longstanding ‘strong dollar policy’



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Currency

Weaker US$ Could Send Gold & Gold Stocks to Higher Targets

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Posted by Jordan Roy-Byrne - The Daily Gold

on Wednesday, 01 February 2017 23:20

Gold has underperformed both in nominal and real terms. Last week it formed a bearish reversal in nominal terms and against foreign currencies. However, the good news for bulls is the US Dollar Index lost support at 100, due to the Trump administration’s tough talk against Germany (and the Euro). Couple that with no movement from the Fed and the greenback should continue its decline, thereby juicing the current rebound in Gold and especially gold stocks.

Take a look at the daily candle charts in the image below. We plot the US Dollar index, the Dollar/Yen cross and the 10-year Treasury yield. The US Dollar index has a potential measured downside target of 97 which happens to coincide with a confluence of moving average support. Dollar/Yen has not broken its corrective lows yet but if it does it would strengthen the odds the US Dollar index falls to 97. Meanwhile, the 10-year yield has some more room to fall if its correction were to continue. In short, lower levels on all these charts is short-term bullish for precious metals.   

Feb12017usdyields

US$, US$/Yen, 10-Year Yield

The daily candle chart below shows GDXJ and GDX. The 200-day moving average has held GDXJ but it has a great chance to continue its rally up to $40-$41. GDX could reach $25-$26. 



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Currency

Bitcoin Investing: How to Safely Own “Digital Gold”

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Posted by Investors Alley

on Wednesday, 01 February 2017 05:14

bitcEndorsed by a large portion of the investing community now, bitcoin has emerged as a legitimate alternative to gold for hedging your portfolio. If you have never heard of bitcoin, use this article to find out if it’s a viable investment for your portfolio. 

Here’s a quick quiz for readers: what was the top performing currency in 2016?

The answer – surprising to many – is the digital currency Bitcoin, which was created in 2009.

It more than doubled its value last year, rising 126%. Its nearest rival was the Brazilian real, which rose by a mere 21%.

Bitcoin – often called digital gold – is currently priced at about $920. It opened this year with a bang, surpassing the $1,000 level for the only the second time ever. It hit its all-time high in December 2013 at $1,156.06.

2016 was the second year in a row that the return of Bitcoin topped that of all other asset classes – stocks, bonds, currencies, and commodities.

What is behind the rise to prominence of this cryptocurrency?

....continue reading HERE

 

....also:

SWOT Analysis: The Dollar’s Future and What That Means for Gold



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Currency

SWOT Analysis: The Dollar’s Future and What That Means for Gold

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Posted by Frank Holmes - US Global Investors

on Tuesday, 31 January 2017 07:03

Strengths

  • The best performing precious metal for the week was platinum, up 0.74 percent.  Silver also clocked a positive gain of 0.28 percent.  Economic growth in the U.S. slowed more than forecast last quarter on the biggest trade drag in six years, reports Bloomberg. Net exports subtracted 1.7 percentage points from expansion in the October – December period, as dollar strength likely was a drag on growth.  Should the new Trump administration push for a weaker dollar, this could lend support to gold.
  • China purchased a net 47 tons of bullion in November, according to data from the Hong Kong Census and Statistics Department and compiled by Bloomberg.  Additionally, shipments of gold from Switzerland to China surged more than fivefold to 158 tons in December, Bloomberg continues, the highest since at least January 2014. Appetite for gold is soaring ahead of the Lunar New Year.
  • According to Bloomberg, the four ETFs backed by gold that have attracted the most money this year are all based in Western Europe. Xetra-Gold, listed in Frankfurt, tops the list by bringing in around $544 million last week. Europeans are turning to the gold on fears that Trump’s “America first” rhetoric will impede global economic growth.

Weaknesses

  • The worst performing precious metal for the week was palladium, down 6.65 percent. The metal is headed for its worst weekly drop in more than a year. CPM Group reported they see palladium and platinum in surplus for the next few years and estimated there are 25 million ounces of palladium in stockpiles, most held by investors.
  • Physical gold demand fell in 2016 to its lowest level since 2009, reports Reuters, as increased prices weighed on appetite for the metal. GFMS, a research unit of Thomson Reuters, also notes that gold jewelry demand is at a 28-year low. Jewelry consumption is down 9.7 percent year-over-year at 551 metric tons in the fourth quarter.
  • As U.S. equities looked to extend a rally on Friday, gold retreated for what might be a fourth-straight day of losses.  However, real rates dropped a bit before the market open and gold eventually crawled into positive territory.  “Gold was due for a short-term pullback, after rallying almost non-stop since late December,” Jordan Eliseo of Australian Bullion Co. said. “Strength in equity markets, with the Dow topping 20,000 points, soft physical markets and a greater focus on rate hikes from the Fed has seen the metal sell off.”

Opportunities

  • UBS says the dollar has peaked and is likely to decline this year under President Trump, reports Bloomberg. The wealth management unit at UBS expects the currency’s future weakness to boost the price of base and precious metals. “We hold that view because we see real interest rates going deeper into negative territory.” Earlier in the week Steve Mnuchin also commented on the dollar, defying two decades of convention at the office of the U.S. Treasury Secretary by stating, “From time to time, an excessively strong dollar may have negative short-term implications on the economy.” In a similar note, Brown Brothers Harriman noted a recent St. Louis Fed study which showed how a strong dollar from 2014 to 2016 was associated with a drag on growth from net exporters.

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