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The week we are looking at the following assets and how they performed:
1) US DOLLAR
2) BITCOIN
3) CRUDE OIL
US DOLLAR
The dollar has fallen against all major currencies as traders take profits following its rapid rise. The markets also show that there has been a 10% increase in the DXY to highs of $110.7 since the index broke $100 in April. Additionally the Fed hiking rates coupled with weakness from other major currencies has resulted in a major strengthening of the Dollar.
Interestingly enough 8th October hursday saw the ECB hike interest rates to 1.25%. Next week we expect an interest rate hike for the BoE and Russia as well as CPI data out of the Eurozone and the US. As other central banks begin aggressive hiking we should see some bearish price action on the Dollar for the short term.
BITCOIN
Bitcoin is up 11% since Wednesday as it gains strength due to the weakening Dollar. The market has injected flows across riskier assets after the USD retracement. If Bitcoin can continue this positive price action then it could record its second consecutive weekly gain, which is a feat the asset has not achieved since July.
CRUDE OIL
Crude has fallen to its lowest level since January of this year. The market is taking into consideration high energy prices, slowing demand in Europe and central banks increasing rates globally. The strong dollar also pressures the price of Crude. The ECB hiking interest rates have a positive effect on the price of Oil as it has risen 4.3% since Thursday.
China’s weak economic data puts hefty pressure on Crude as this is an indication of slowing demand. China’s crude oil imports have fallen 9.4% in August from a year earlier. Putin expressed that Russia would halt oil and gas exports if price caps are imposed, which also jolted the asset to find some support around the $82 level.
Crypto products are unregulated and could be highly volatile. Please be aware of the risks before investing.
DIFX shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee, or implication by DIFX that the forecast information will eventuate, that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses in particular if the conditions or assumptions used for the forecast or mentioned in the analysis do not eventuate as anticipated and the forecast is not realized.
