The dollar fell for a fifth consecutive trading day as traders shrugged off the exemption of popular consumer electronics from tariffs and President Trump played down the exemption for the technology sector.
The Bloomberg Dollar Spot Index fell as much as 0.4% on Monday, extending last week’s 2.4% decline. The drop last week was triggered by escalating trade tensions between China and the US and growing concerns over global economic growth. This move pushed the index to a new low for the year, the last time this happened was in October.
The Trump administration’s weekend suspension of tariffs on goods such as smartphones, laptops and memory chips had raised concerns that the president might show flexibility in the trade war. But Trump’s promise to impose specific import tariffs on the consumer electronics industry and review microchips in national security tariff investigations meant that such concerns were only temporary.
When the Asian markets began trading, he posted on social media: “No one can ‘get out of the predicament’.”
For the US dollar to keep rising, a swift and peaceful resolution of the trade war is needed to avoid long-term damage to the US economy, said Dane Cekov, senior macro and currency strategist at Sparebank 1 Markets AS in Oslo. “As the impact of Trump’s tariffs shows up in hard data such as consumption, inflation and the labor market, the dollar will continue to weaken in the coming months,” he added.
There are few signs that the pressure on US assets is easing. Even though Trump softened his stance on tariffs last week, investors still expect to reduce their holdings of the dollar. Data from the US Commodity Futures Trading Commission shows that the indicator measuring dollar volatility remained at its highest level in two years as of April 8, while speculative traders have increased their short positions in the dollar since October last year.
Although Minneapolis Federal Reserve Bank President Neel Kashkari expressed confidence that the market would remain orderly, he downplayed expectations that the Federal Reserve might step in to support the market after the president of the Boston Federal Reserve Bank suggested such a possibility. He said over the weekend that market volatility was expected as investors were determining the new normal in the United States, and the Federal Reserve had no influence over it.
JPMorgan Chase strategists, including Fabio Bassi, wrote in a note to clients: “We remain cautious on risky assets and expect them to trade in a range in the near term. Without clarity on negotiations and support from the Federal Reserve, any technical rebound could be short-lived.”
Technical analysis:
Gold: The price is consolidating above 3200. The blue zone we alerted last Friday was hit precisely after the break above 3220. We will continue to watch for a momentum break signal today, while also being mindful of a rebound after the price sweeps through the liquidity below 3200. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
The Nasdaq: After breaking through the blue zone alerted by our plugin, the price retraced to confirm support and then initiated a 500-point movement. The recent downward pressure on the price has eased. Today, we should pay attention to the pullback confirmation in the 19,000 – 19,800 range. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Crude oil: Due to Trump’s 90-day suspension of full reciprocal tariffs, the pressure on oil prices from recession concerns has been greatly alleviated. After the blue zone we alerted last Friday, a pullback was followed by a rally of 200 points. Today, we continue to watch for the pullback confirmation signal near 60.50. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V:Hana-fgfg.
Today’s key financial data and events to focus on:
20:00 National Economic Confidence Index of Canada (to 0411)
