[USDX] Recession Fear and Long Bias 2019 0826

Dollar Index four-hour chart, source:FXStreet.com

cf. [EUR] Rising Recession Risk 2019 0826
cf. [USDX] Waiting for Jackson Hole Symposium 2019 0823
cf. [GBP] Short Bias to Cable 2019 0820


Jackson Hole Symposium was paid attention by market participants and Jerome Powell, Chair of Federal Reserve was done, especially. Powell told that the problem was the trade war between United States and China, top two economies. He didn't mention about interest cut. Bloomberg, U.S. economy news agency reported that Fed told the trade war was the risk not interest rate.

And the U.S.-China trade tension extends. China announced on last Friday it would impose the retaliatory tariff on U.S. goods worth 75 billion dollars including crude oil and soybeans on September 1 and December 15, the same days, planned to impose the tariffs on Chinese export goods.

The experts analyse China gives up the negotiation with Donald Trump, 45th U.S. President and prepares prolonged trade war.

When Powell spoke at the meeting, dollar index, which measures greenback against basket of major currencies plunged to 97.60. Market's disappointment China's retaliatory tariffs lowered dollar index.

But greenback rises at beginning of the week, Monday. It rose to 97.98 as of 1300(UTC+0).

Market expects that Fed will cut its benchmark interest rate, 25bp(0.25 percent). Someone anticipates 50bp. Fed has not gone against market's expectation and it seems that the benchmark interest rate will be cut in mid September.

But euro is ready to be devalued, too.

Olli Rehn, Governor of the Bank of Finland and member of Eurpean Central Bank, spoke that ECB prepares more strong 'package' to stimulate economy while the interview with Wall Street Journal on last Thursday. The package includes interest cut and Quantitative Easing.

Mario Draghi, ECB president, already spoke a new currency easing in September during the news conference in last month.

And dollar tends to move with American bond yield, recently. We need to watch U.S. bond yield as well as currency pairs, too.

Dollar Index daily chart has increased bottoms since this year. It seems that main trend of USDX is upward and we need to watch the market with long bias.











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