USD climbs from lows

The USD is steadily regaining ground in the first week of May, overturning a -2% loss in the last week of April to move up +0.9%.

US Trader
Source: Bloomberg

Nevertheless, the mighty dollar is still almost 5% weaker in 2016.

I was expecting a risk that the views of a couple of non-voters in the FOMC may be representative of the committee, however Fed New York President William Dudley, a voter, somewhat dismissed the soft April payrolls report in terms of his economic view. He said that the possibility of a double rate hike this year remains a reasonable expectation.

Meanwhile, St Louis Fed president James Bullard, also a voting member, commented that the committee already has an indication of the future policy direction, therefore there is no need to give further indications of it through language on the balance of risks. His comments were relating to discussions on how the Fed communicates with the markets.

The balance of risk assessment has always been an important piece to signal intention, and the lack of it in recent policy statements is probably unnerving market participants. They have to parse other avenues for real-time indication of the Fed’s stance.

Nonetheless, the more hawkish views were responsible for the continued recovery in the USD. It would need more time before the markets come around to the idea of two rate hikes, but for now they are still not convinced the conditions are ready to accept that.

Over the weekend, China reported its trade performance for April. It was a mixed reading. Exports remained in positive growth when you calculate it in terms of CNY, is up +4.1% although slowed from March’s +18.7% surge.

They remained weak in USD terms, shrinking -1.8%, while imports contracted significantly more than estimated at -10.9%. Oil traders may be cheered by the report that oil imports by China, rebounded +3.2% from the previous month due to strong demand from independent refiners.


Yesterday: S&P 500 +0.3%; DJIA +0.5%; DAX +0.2%; FTSE +0.1%


*You may wish to follow me on twitter at

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Een artikel zoeken

Form has failed to submit. Please contact IG directly.

  • Ik wens per e-mail informatie van IG Group bedrijven te ontvangen over handelsideeën en IG's producten en diensten.

Voor meer informatie over hoe wij uw gegevens mogelijk kunnen gebruiken, bekijkt u ons Privacy- en toegangsbeleid en onze privacy website.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.