Admiral Markets Group consists of the following firms:

Admiral Markets Pty Ltd

Regulated by the Australian Securities and Investments Commission (ASIC)
CONTINUE

Admiral Markets UK Ltd

Regulated by the Financial Conduct Authority (FCA)
CONTINUE

Admiral Markets AS

Regulated by the Estonian Financial Supervision Authority (EFSA)
CONTINUE

Admiral Markets Cyprus Ltd

Regulated by the Cyprus Securities and Exchange Commission (CySEC)
CONTINUE
Note: If you close this window without choosing a firm, you agree to proceed under the FCA (UK) regulation.
Note: If you close this window without choosing a firm, you agree to proceed under the FCA (UK) regulation.
Regulator fca efsa CySEC asic

U.S. dollar marginally depreciated in light of negative news

May 13, 2019 12:30

US Dollar depreciated

USD

Last week, tensions dominated the stock market in response to U.S. president Donald Trump suggesting that negotiations with China, regarding international trade questions, were not going as smoothly as previously reported. After the last meeting between the U.S.' and China's representatives last Friday in Washington, the U.S. has increased import tariffs on Chinese goods entering the country. This solution will impact goods with an annual volume of about $200 billion, and their tax rate will increase from 10% to 25%. In the long run, this will negatively affect consumption and production, as the price of goods will increase and demand will decrease. The U.S. negotiators also said that China has been given a 3-4-week period to reach a trade agreement, otherwise an additional 25% tariff on 325 billion USD worth of goods would be introduced.

Data was scarce in the U.S., although it was positive and in-line with expectations. Most of the attention was drawn to inflation, which was at 2.0%. This level is in line with Federal Reserve's policy, and is not putting pressure on its' members to raise interest rates, which provides investors with an opportunity to take positions in more risky asset classes. Unemployment claims last week remained stable at 228 thousand.


EUR/USD

Principal currency pair the EUR/USD has reflected a tendency of increased demand for risky assets. Economic data from Europe was ambiguous– Germany's indicators showed stabilization, although other countries recorded further slowdown in activity. According to data from March, Germany's industrial production has increased by 0.5% compared to a month ago, manufacturing orders increased by 0.6% and export increased 1.5%, which indicates that the biggest European economy was able to take a breather for a moment, outside of the slowdown of global growth and the growth of major trading partners. Meanwhile, other large and significant countries, such as Italy and Spain, have recorded an insignificant decline of economic indicators. It is important to note, that larger trade tariffs between the U.S. and China will negatively affect China's business sentiment and manufacturing volumes, which in the long-run will affect Germany and the whole of Europe - therefore long positions in this pair should be more tactical than long-term. The EUR/USD has ended the trading week appreciating 0.3%.


USD/JPY

Principal Asian pair, the USD/JPY, has demonstrated particularly negative sentiment. When investors, while anxious regarding continually increasing tensions between the biggest global economies, chose Japanese Yen, they assumed it was a safe alternative. Data in Japan was scarce, among which one of the most important was household expenses, which increased 2.1% per year and indicated positive tendencies between consumers. The USD/JPY has ended the trading week depreciating -1.0%.


GBP

The British pound has surrendered to negative sentiment, and the pair has depreciated despite weakening U.S. dollar. This was largely due to ongoing talks between the Tories and Labour on a possible coalition in an attempt to ratify a Brexit agreement. This solution requires a stable 320 vote coalition, which would allow the acceptance of all of the Brexit proposals. Therefore, Theresa May needs strong and significant support from the Labour party, with whom negotiations are still ongoing. There was no important economic news published. The GBP/USD has ended the trading week dropping -1.3%.


Economic Events

This week will begin with labour market data from Britain, and manufacturing data from Europe. On Tuesday, China will announce indicators of retail sales, manufacturing, and investments which will be closely monitored by investors, while waiting for signs of economic growth stabilization. On Wednesday, Germany's and Europe's preliminary first-quarter growth results will be announced, and later, U.S. retail sales and manufacturing volumes will be published. On Thursday, investors will be expecting news from the U.S. real estate sector, and Friday will be fairly calm and only European inflation will be announced.

According to Admiral Markets market sentiment data, the EUR/USD long positions are held by 40% of investors (dropped -8 percentage points, compared to last week's data). In the main Asian pair USD/JPY 72% of investors hold long positions (increased +22 percentage points). In GBP/USD pair 71% of participants expect growth (increased +48 percentage points). This kind of market data is interpreted as a controversial indicator, therefore appreciation is likely in EUR/USD pair and depreciation in GBP/USD and USD/JPY pairs. Analysis of positioning data should always be accompanied with fundamental projections and technical analysis.

Sources: bloomberg.com, reuters.com, Admiral Markets MT4 Supreme Edition, investing.com


Investing in Forex with Admiral Markets

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Download MetaTrader 5 and begin trading today!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Saulius Radžiūnas, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.

Risk Warning

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.