Dollar Gains as U.S. Tech Stocks are in Sell-Offs for the Second Time

  •  The U.S. Tech Stocks are in its second sell-out for the second time in less than a week. The Dollar was up on Wednesday and is further strengthening in this week’s trading sessions. 

    The U.S. Dollar Index inched up 0.07% to 93.502 by 10:01 PM ET (3:01AM GMT). 

    “U.S. Equity futures will likely be a guide to currencies today. The more equity futures fall, the larger the strength in the dollar and the yen,” Commonwealth Bank of Australia’s head of international economics Joe Capurso told Reuters. 

    In the aftermath of European Central Bank (ECB) chief economist Philip Lane’s comments during the previous week regarding the monetary policy, the dollar saw gains against the Euro. 

    “Lane appears to have succeeded in drawing a line in the sand at $1.20 at least for the time being,” Rabobank senior FX strategist Jane Foley told Reuters. 

    “We see scope that euro/dollar could dip further towards the $1.17 level on a one-month view,” she added. 

    With investors observing the any comments on the euro, the US dollar could see even more gains during the ECB meeting on Thursday. 

    The GBP/USD pair was down 0.23% to 1.295 on the back of turbulent Brexit negotiations between the U.K. and the European Union (EU). 

    Investors are looking out for more information as U.K.’s blueprint laying out the terms life post-Brexit will be expected later in the day. Fears of a potential no-deal Brexit accumulated losses for the sterling. 

    The USD/JPY pair inched down 0.08% to 105.93 

    The USD/CNY pair edged up 0.12% to 6.8520. Data released earlier in the day showed that the Consumer Price Index (CPI) and Producer Price Index for August rose 2.4% and 2% respectively year-on-year, with CPI rising 0.4% month-on-month.  

    The AUD/USD pair inched up 0.06% at 0.721 and the NZD/USD pair edged up 0.03% to 0.6620. 

    TECHNICAL OUTLOOK 

    In the daily charts of GBP/USD, the pair opened at 1.2979. As what we can see in the charts, the sterling is in a negative outlook against the greenback since last week.   

    Amidst the fear of a possible no-deal Brexit, investors are eyeing once again at the dollar as a safe-haven further strengthening the dollar along with other factors coming from other countries such as Australia and China.  

    The AUS recession, the upcoming elections in the U.S. in November, the Brexit talks in U.K. and the ongoing conflict with china all seems to have a positive outlook on the U.S. dollar.  

    As the U.S. Tech Stocks also fell for the second time in less than a week, the world is once again looking at the dollar as it’s currency reserve and the dollar may sooner regain its full strength as it did post-pandemic. 

    The dollar this week is on a positive outlook and dollar bulls have gained since Monday but extreme caution should still be in check for possible spikes in volatility which may occur due to Brexit woes later in the day.  

     

     

     

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