On Tuesday, the 8th of January, 2019, the American dollar had experienced a warmth of dawn, as it had finally been able to break above its initial resistance zone at 95.20. After rebounding from a three-months low in the US trading session, the American dollar had closed the day on 95.40, while the Euro slid slightly by 0.3 percent, resided at 1.1443 on yesterday’s (Tuesday), market closure, largely catalyzed by the release on an uncomforting faltering in German production output.
As the German production data faltered, the signs of global scale economic slowdown seemed to be much closer than forecasted, as the past week had experienced a cascade of distressful economic data from all over the world, including Mainland China’s PMI data and a plunge in the South Korean export.
Amid a bunch of wicked data inducing terrible horrors in the currency markets, the American dollar had resisted its freefall momentum, despite a growing possibility of either a pause or a halt on the Federal Reserve’s interest rate cycle.
After observing the Tuesday’s market, several currency analysts had signaled a bearish Euro and a dithered American dollar, amid an unexpected whiplashing of German manufacturing output and US government shutdown alongside dovish Fed talk.
Mark McCormick, the TD securities’ North American head, commented, “The prospects of growing fiscal support outside the U.S. should amplify the growth convergence story this year just as the Fed nears the endgame and temporary U.S. support ebbs”.