Weekly outlook | Risk appetite remains positive due to weaker dollar

Market commentary

Last week’s interest rate decision by the UK central bank has so far had little long-term impact, as the pound was able to recoup most of its early losses. In general, the weak dollar is still fueling a positive risk appetite. Equities can therefore continue to rise and risk sentiment remains positive. The weak dollar also helps metal prices to rise, with Silver in particular continuing to move higher. The psychological price mark of USD 30.00 seems very close now.

Important news for the week

– US – Producer Price Index – Producer prices from the US could continue to move the dollar. These are the preview of consumer prices, which then emerge with a time lag. If the data weakens, there is a greater chance that the Fed could cut interest rates rater soon. This should therefore weaken the dollar again. On the other hand, prices could rise, which could then strengthen the dollar, as the Fed is still unlikely to adjust rates anytime soon. Higher interest rates leave the Greenback more attractive for investors.

A closer look at the USDJPY is interesting, as the Japanese central bank has hardly been active. The currency pair could hence rise further. The data will be published on Tuesday, 14 May at 14:30CET.

– US – Inflation rate – The price level in the US continues to be an important indicator for the central bank for the course of interest rates. Recently, consumer prices have not fallen any further towards the 2% level and are currently hovering at 3.5%. This is probably one reason why the Federal Reserve will only reduce interest rates slightly this year, if at all. If the interest rate is only adjusted slightly, this could lead to a stronger dollar. On the other hand, a lot of negative data from the eurozone may already be priced into the EURUSD currency pair, which is not currently falling further.

If the EURUSD currency pair now also breaks through the 50-moving average to the upside according to the weekly chart, further upside potential could emerge. The data will be published on Wednesday, 15 May at 14:30CET.

– US – Crude Oil Inventories – Crude oil inventories from the US indicate a snapshot of demand in the oil market. If inventories are at a low level, it can be assumed that demand prices could rise. Here in particular, it may be worth taking a look at USOUSD.

From a chart perspective, this market is once again below the 50-period moving average, which could also support falling prices. The data will be published on Wednesday, 15 May at 16:30CET.

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