The dollar: a Bad start in November can take a long time

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After a fruitful October “American” new month started very badly, losing the day before, all earned over the previous three trading sessions. On Friday on world markets dominated by the interest to purchase risky assets, the overwhelming demand for the dollar. The technical picture suggests that the potential for growth seems to be exhausted.
At the moment the prospects of the USD do not look in the best way. The December fed rate hike is already largely priced in, and therefore will not be able to provide substantial support.
Meanwhile, investors confidence returns, which reduces the attractiveness of the dollar as a protective asset. Trump has outlined the prerequisites to mitigate the conflict with China, and, perhaps, to resolve trade disputes. Of course, friction can not come to naught in one day, but at least there were opportunities for common dialogue between Washington and Beijing, which can not fail to please international investors.
It is also important that simultaneously the demand for the European currency, with the progress of negotiations on Brazito. In the longer term, if to take for a basis the script output with the deal, the players will withdraw from the price risks of “divorce process”, which means that the pound will increase, helping its European counterpart.
Thus, if in the coming weeks on global markets will not hit a new stress wave is a prolonged flight from risk, it’s possible that “American” will continue to slide downward. Further much will depend on the rhetoric of the fed at the December meeting, as widely expected, the BOJ will raise rates a fourth time this year.
Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS