Dollar near 7-week low as markets look past trade woes

The dollar hovered near a seven-week low against a basket of major currencies, in part as safe-haven demand for the U.S. currency ebbed on relief that tariffs the United States and China imposed on each other's goods were set at lower levels than some had feared.
The British pound stepped back from two-month highs on caution over whether the European Union and UK can reach a Brexit deal at their ongoing summit while the New Zealand dollar jumped to three-week highs on Thursday after strong domestic GDP data.
The dollar index stood at 94.554 (DXY) (=USD), near its seven-week low of 94.308 touched on Tuesday as its more risk-sensitive rivals held firmer.

 

The euro traded at $1.1671 (EUR=), not far from its peak in August and September around $1.1730.
The Australian dollar, seen as a proxy for China-related trades as well as a barometer of broader risk sentiment, also held at three-week highs, having gained 1.5 percent so far this week.
The Aussie was also helped by comments from Chinese Premier Li Keqiang on Wednesday that Beijing will not stoop to competitive devaluation of its currency.

 

Dollar Unchanged Ahead of Fed Meeting, New Zealand Dollar Jumps

The U.S. Dollar was unchanged on Wednesday as markets awaited the conclusion of the Federal Reserve’s latest meeting, while the New Zealand Dollar jumped against the dollar on a better-than-expected business confidence report.

The Fed is widely expected to hike interest rates later in the day. Markets also anticipate another rate hike before the year end, although the outlook for 2019 is less clear, according to analysts.

As well as an interest rate decision, the Federal Reserve will also serve up its summary of economic projections, outlining policymakers' expectations on economic growth, inflation and unemployment.

 

The U.S. dollar index, which tracks the greenback against a basket of other currencies, was unchanged at 93.73 by 11:01PM ET (03:01 GMT). The index has slipped around 3% since August.

Global trade tension remained in focus as China’s Vice Commerce Minister Wang Shouwen said Beijing would resume trade talks only if the U.S. show sincerity and not put a knife at China’s throat.

 

Markets Weaken With Russell 2000 Leading Lower

That one-day bounce in the Russell 2000 last week is looking like a long time ago as yesterday finished with a cut below its 50-day MA. Technicals are fading fast as relative performance began a cliff fall.

While other indices haven't shown this same level of weakness it's a worrying start as Small Caps' typically lead. The slower channel remains intact so it's not a full on reversal yet.

The NASDAQ 100 started brightly and looked to have generated a solid move to challenge its bull trap before sellers pushed it back to its starting point - leaving a 'gravestone doji'. While the Russell 2000 struggled yesterday, the weak finish for the NASDAQ 100 wasn't enough to register as a support break.

 

The NASDAQ had already lost support prior to yesterday, but there was no acceleration to the downside.
The S&P left another 'bull trap' in its wake but didn't give up (newer) channel support; it's still a long way from the long-standing summer channel - illustrated by the thin blue line.
For today, keep an eye on the Russell 2000. It looks like it wants to lead lower and this will be bad news for other indices. If there is to be a bullish surge, then the NASDAQ 100 will be the index most likely to lead out.