NEW YORK (Reuters)- The U.S. dollar rallied to the bottom of 97 after a week of tight trade and weak economic data as the Federal Reserve injected huge liquidity into the market on Saturday (Jan.4), a weekly financial market survey showed. Analysts and traders are at odds over the dollar's outlook for next week.
Atomic asset management (hong kong) ltd., founder and fund manager, on monday said that the dollar index technology form at the end of the line in december 2019 confirmed that the top, the important support has been broken, there is a risk of continued decline, it is recommended that investors every high firm short, the space below huge!
This week, the dollar continued to suffer from a sell-off in the last half of the week, with positive news of the trade situation, weak US economic data, increased economic concerns, and the Federal Reserve injected huge liquidity into the market, but on Thursday, Friday, the dollar was in a rebound, particularly the highest rise to Friday.
The U.S. Supply Management Association (ISM) reported the largest decline in manufacturing activity in more than a decade in December, with orders falling to nearly 11-year lows and manufacturing employment falling for the fifth consecutive month. The U.S. manufacturing industry has plunged into its worst recession in a decade and has also weighed on the dollar index.
Karl Schamotta, chief market strategist at Cambridge GlobalPayments:\" This is a frustrating number, and uncertainty associated with trade conflicts is actually continuing to hurt manufacturing, pointing to weak GDP, especially in the coming quarter, as you are likely to see a fall in inventory rather than a sustained increase.\"
The long-term impact on the dollar is unclear. Although the dollar was dragged down by economic data on friday, the dollar could eventually benefit if the us manufacturing slowdown weakens hopes of global growth by 2020.
\"We think the overall trend for 2020 is still the weakening of the dollar against major currencies,\" said Thierry Wizman, global rate and foreign exchange strategist at Macquarie Group. This is partly underpinned by the idea that the global economy will return to growth, which will benefit non-US currencies.
Technically, the U.S. dollar index rebounded this week and is now on the block on Friday, although given that it has broken the upward trend line since 2018 and is also in the downward path since October 2019, it is not much room to continue to break through.
Regarding the yen: U.S. drone strikes in Iraq killed Iranian generals, causing a sudden rise in tensions in the Middle East, as risk-averse assets such as the yen rose and the U.S. dollar\/JPY fell below several technical supports, its lowest since early November.