Tuesday, November 15, 2016

IAFT Weekly Economic Review

Last week was a very important event, where participants of currency and stock markets were expecting for quite some time - the US presidential election. Since the preliminary surveys indicated a possible victory of the candidate from the Democratic Party of Hillary Clinton, the US dollar was feeling quite well in many pairs, including pairing with the EUR, British pound, Japanese yen. According to many of analysts, Clinton's presidency did not implied the major changes in foreign policy, and in relation to the United States economy.

Thus the news about the probable victory of the Republican candidate Donald Trump has plunged the markets into a real shock, and their reaction was the large-scale sale of "risky" assets, including the US dollar and stock indices. As a consequence of the sales dollar fell against the yen to 101.20 of support area, the euro rose against him to the area of 13th figure, and the pound - up to resistance of 1.2546. This market reaction in the case of Trump's victory was quite expected, so further development was a complete surprise.

A surprise for many, but not for us, because we have warned that the situation can be changed dramatically at any moment, that exactly what happened. Subsequently, the dollar was bought out, and the yen actively sold off, as a result the dollar/yen exchange rate rose by the end of the week to the area of 107th figure, the euro ended the week by falling to 1.0830. Turn and widespread increase in the dollar can be considered as the development of the next wave of the upward trend, but it can be sensitive to the FRS's comments and, of course, of the new US President, so IAFT traders on the dollar can not lose vigilance, as this can lead to greater losses. LinkList

Best regards, 
International Association of Forex Traders