The dollar held very steady within the established range and investors have placed some very heavy bets against the greenback. Even though a widening interest rate is working in favour of this, the gap between the US and German debt is the highest it has been. The dollar’s performance over the last couple of months can easily be related to the swings in the risk appetite and a weaker dollar has certainly coincided with a demand for riskier assets. The military strikes were telegraphed and there has also been a continuation in the broader market theme.
The dollar was at 89.75 and it has weakened by over 0.3% so far. This has all happened in this month alone and this has taken its yearly losses to over 2.5%. It has also extended the theme that took place last year. There were some obvious jitters from the market in the last week or so and this is especially the case with the currencies that are in Turkey and even Russia as well. The positioning of the dollar has remained at a very high level and in a wider measure, the positioning has included the new contract on the NZ dollar. This also includes the Russian rouble and the Brazilian real. The US dollar has also posted a short-term position and it has been valued at $27.21 billion. This is the most that it has been since August 2011.
Other major currencies have also been trapped in a trading range. The euro started out the week at around $1.23 and it has been trading at this amount all week. The US treasury have reported that this did not shake up the market, even though it is combined with the Trump administration refusing to name any trading partners. This is even the case as potential tariffs and negotiations try and cut through the massive trade deficit.
The Japanese yen is drawing a lot of demand in terms of political tension and this is even combined with market turmoil as well. It has been said that the dollar’s response has been limited and this is because there has been an advanced notice of a Syrian strike. This has given speculators a lot of chance to brace for the event. A lot of speculators are showing a much lower response to the yen supporting factors and this is even the case after Japan have made it more than clear that they are not going to normalise the policy that they have any time soon. This goes for domestic factors as well, such as the falling support for the Japanese prime minister.