Dollar extends rally as Europe exudes weakness

USD – Dollar remains king as Europe remains weak

Riksbank – Another bank backtracks from tightening

Turkey – Lira in serious danger

Stocks – 3M results sink the Dow

Oil – Russian supply outage drives prices higher

Gold – Steadies as stocks fail to make fresh highs


Hail to the King dollar.  The US economy is not really driving the last part of this greenback rally, it is mainly the rest of the world is still showing weakness.  A constant theme coming out of Europe is risks remain to the downside as growth remains weak and we are not seeing many reasons to be optimistic in the short-term.

In Europe, the ECB economic bulletin cemented the view that ample accommodation will remain in place.  Europe continues to see slower growth momentum and that does not bode well for the euro.

Early in New York, mixed jobless claims and durable goods data provided no clear catalyst.  The dollar held onto gains after the strong 2.7% rise in durable goods, while jobless claims had the biggest rise since 2017.


Sweden’s central bank (Riksbank) sent the krona falling after extending their view for the next rate hike.  It looks like they will not be raising rates until early 2020 and the bond buying program will now continue till the end of 2020.  The krona fell to the lowest level to the dollar since 2002.


Turkey’s central bank (CBRT) delivered a blow to the lira after they removed the hawkish rate pledge.  The slight adjustment to their forward guidance sent the lira down 1.3% to the dollar.  This will go down as a dovish pivot, a theme investors are getting all too used too.  The lira is down about 6% to the dollar in April and many are questioning the CBRT’s decision to wait for inflation to slow down before cutting rates.


The Dow Jones Industrial Average is expected to open lower following terrible results from 3M.  Revenues came in light and the company cut guidance well beyond the lowest analyst estimate.  The Minnesota based company also announced they will be cutting 2,000 jobs to cut costs.  Shares are down 8%.

Another big earnings report came from healthcare giant, AbbVie.  They delivered a clean beat on both the top and bottom line, while raising guidance.  The report was not all positive as sales of Humira, which is the best selling drug in the world fell 5.6%, the first year-over-year decline since 2011.


Crude prices resumed the bullish move higher after Russian oil shipments to Europe have been halted due to contamination.  Poland has stopped taking on Russian oil for the time being and that has provided a slight bid here for oil prices.

The rally is somewhat small, so we should not be surprised if we do see oil pullback tentatively.


The precious metal refuses to break despite dollar strength.  The sour earnings report from 3M and lack of a catalyst for stocks to continue the record run could see gold prices receive a bid here in the short-term.

The longer-term outlook however remains weak for the precious metal as the US economy still remains strong and trade deal optimism could deliver a boost to global growth in the coming months.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya