Global stocks soar as Middle East tensions eased
The US dollar rose today after some weak data from Europe and after poll data showed a sharp increase in support of Trump’s economic policies. A poll by the Financial Times showed that most Americans believed that Trump was doing a good job on the economy. This comes at a time when the unemployment rate is at historic lows and when wages are rising. It also comes at a time when US stocks have continued rallying and as the US reached phase one of the trade deal with China. Historically, incumbent presidents who have been supported by a strong economy have won re-election. This was also a day after ADP showed that the economy created more jobs than expected in December.
The euro declined today after the market received some negative data from the country. In Germany, exports declined by 2.3% in November. This was lower than the previous gain of 1.5%. Imports declined by 0.5% after rising by 0.5% in October. As a result, the country’s trade surplus narrowed from €20.4 billion to €18.3 billion. On a positive note, German industrial production rose by 1.1% in November. The unemployment rate in the EU also remained unchanged at 7.5%.
Global stocks rose sharply today as the US and Iran sought to deescalate tensions. This happened after Iran shot a couple of ballistic missiles at US bases in Iraq. There were no US casualties in these attacks. In a tweet, the country’s foreign affairs minister said that the country did not seek war in the region. In a statement, Donald Trump said that Iran appeared to be standing down. This means that previous risks appear to be easing. In Asia, the A50 and Shanghai composite rose by 160 and 30 points respectively. In Europe, the DAX, CAC 40, and Stoxx 40 rose by 160, 18, and 25 points respectively. In the United States, futures tied to the Dow and S&P rose by 90 and 10 points respectively.
The EUR/USD pair declined to a low of 1.1097. It then rose to a high of 1.1115. Still, the price is below the December high of 1.1240. The price is slightly below the 14-day and 28-day exponential moving averages. The dots of the Parabolic SAR are above the current price. The pair may continue moving lower ahead of official NFP data tomorrow.
The XBR/USD pair declined sharply as the markets reacted to the new developments in the Middle East. The pair moved from yesterday’s high of 70.65 to a low of 64.63. The price is along the lower line of the Bollinger Bands while the RSI has declined from the overbought level of 73 to the current 35. The signal line of the MACD has continued to decline. The pair may continue to see some volatility if the Middle East crisis extends.
The USD/JPY pair rose sharply as risks in the Middle East appeared to be easing. This is because the yen is usually viewed as a safe haven currency. The pair rose from a low of 107.65 to a high of 109.50. The high is still below the previous triple top of 109.70. The price is above the 14-day and 28-day moving averages while the average true range has continued to soar. The pair will likely see some volatility ahead of the NFP data tomorrow.