With the Dow hitting a new high, all eyes are on the direction of the U.S. dollar
16.04.2021
- University of Michigan Consumer Sentiment Index
- The Dow Jones Industrial Average hits a new record high
Yesterday, the Dow Jones Industrial Average hit a record high, sparking a risk-on market characterized by rising stock prices, a weaker dollar, and lower interest rates. Crude oil rose to $63.60 for the first time in about a month, while gold also rose in inverse proportion to the U.S. dollar and is currently trading around $1,764. The market reacted positively to the release of the U.S. Philadelphia Fed Manufacturing Index for April, which came in at 50.2—its highest level in 48 years.
In the foreign exchange market, cross-yen pairs are divided into those trending upward and those trending downward. The euro/yen and dollar/yen pairs are holding steady, while the pound/yen pair is seeing its upside limited and has entered a period of stagnation. Since the euro/pound pair is rising and the pound/dollar pair is falling, we should remain cautious about a potential decline in the pound/yen pair.
Today, at 6:00 PM, the Eurozone Consumer Price Index and trade balance will be released, followed by remarks from Bank of Canada Deputy Governor Kanif;Woods, and at 8:30 PM, Turkey’s Housing Price Index; at 9:15 PM, Canada’s Housing Starts; at 9:30 PM, U.S. Housing Starts and Building Permits; at 11:00 PM, the University of Michigan Consumer Sentiment Index; and at 11:45 PM, remarks by Kaplan, President of the Dallas Fed.We will be closely monitoring how the recent rise in stock prices and decline in interest rates impact the foreign exchange market.
Author: Keisuke Sakurai
