DXY17 Feb 2019 10:41
U.S. Dollar Is On Thin Ice
David Madden, market analyst at CMC Markets also said that he thinks that despite gold’s weak momentum, it will eventually win out over U.S. dollar strength.
He added that the U.S. dollar is benefiting more from weaker global currencies than legitimate strength. While the Federal Reserve has nearly established a neutral outlook on interest rates, other central banks have turned even more dovish.
“This less-dovish sentiment will continue to support the U.S. dollar but it will be difficult for the currency to rally and I think this is where gold benefits,” he said. “Don’t expect to see any major break outs, but the upward trend in gold is here to stay.”
Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said that he also sees the recent rally in equity markets supporting the U.S. dollar, but this will only prove to be a limited catalyst.
“The dollar is on thinner ice, in our view, with its primary remaining support factor -- the outperforming stock market -- running into layers of resistance,” he said in a report Friday. “A greenback rally likely requires the S&P 500 vs. world gauge to sustain above 2018's record high. We view mean reversion as the greater risk.”
This is great news for metals I said a week ago the Dollar is nearing peak.