Strengthening US Dollar Still Growing Market
In Asia Pacific money market trading until today afternoon, the general US dollar or greenback is still moving very lightly when the market has seen that the US dollar still seems to be raising its strengthening after the lack of convincing US economic data earlier.
As we know that in yesterday’s trading, the greenback condition was under pressure from some other major currencies in the world, causing EURUSD to close higher at 1.1683, GBPUSD closed up at 1.3208, AUDUSD closed up at 0.7407 and USDJPY closed up at 110.75.
And for a while this morning, EURUSD is moving at the level of 1.1669, GBPUSD is moving at the level of 1.3198, AUDUSD at the level of 0.7392 and the yen at the level of 110.76.
In earlier trading, the US dollar index traded soured after the EU reached an agreement on immigration issues at the weekend so that political integrity in Germany was maintained. The problem of migrants in Europe became the main topic of discussion in the EU Summit because the region was flooded with refugees from Asia and Africa causing problems of funding which made some difficulties as well as security issues.
In addition, last weekend’s US inflation data through PCE core data did support the Fed’s rate rise, but the US consumer income and spending situation slightly hampered the pace of further dollar index gains.
As we know that the positive conditions of the previous dollar index occurred because some Fed officials have managed to convince the market that the economy in the US still need to increase interest rates in order not to heat up. After Jerome Powell and Eric Rosengren expressed a consistent flavor of Fed rate hikes, then Raphael Bostic of Atlanta also stated that the US economy is still moderate expansion, so that it soon heats up again.
Developing discourse that the Fed can raise interest rates 2 more times this year and 4 more next year. This condition certainly keeps a positive rhythm for the dollar index which previously also strengthened due to unfinished trade war discourse.
The trade wars between the US and China, where new tariffs could raise the price of goods in the United States will lead to higher inflation and the need for Fed rate hikes, and make the dollar index continue to strengthen.
Although data on US economic growth or GDP declined but PCE core data managed to create investor confidence, but this condition is still making further gains for the dollar index so that the best 11 months will likely soon be passed again.