This is what you should know Friday April 12:
He American dollar (USD) gains strength against its main rivals in the European session on Friday, with the Dollar Index rising to a new 2024 high above 105.50. The export and import price data for March will be the protagonists of the US economic agenda along with the preliminary Consumer Sentiment Index for April.
In the United States, disparate macroeconomic data was published on Thursday that made it difficult for the dollar to rise after Wednesday's rebound, driven by solid inflation data. However, hawkish comments from Federal Reserve (Fed) officials helped the currency hold firm. Meanwhile, escalating geopolitical tensions appear to be providing an additional boost to the dollar as a safe haven value. Late on Thursday, a US official said they expected Iran to attack Israel and had warned it not to further escalate the conflict in the Middle East, according to Reuters.
Price of the US Dollar this week
The following table shows the percentage change of the United States Dollar (USD) against the main currencies quoted this week. The US Dollar was the strongest currency against the Euro.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 1.40% | 0.91% | 0.86% | 0.89% | 1.08% | 0.54% | 1.02% | |
| EUR | -1.44% | -0.51% | -0.56% | -0.52% | -0.34% | -0.88% | -0.41% | |
| GBP | -0.92% | 0.51% | -0.05% | -0.02% | 0.16% | -0.39% | 0.11% | |
| CAD | -0.87% | 0.55% | 0.05% | 0.03% | 0.21% | -0.33% | 0.16% | |
| AUD | -0.90% | 0.52% | 0.02% | -0.03% | 0.19% | -0.37% | 0.11% | |
| JPY | -1.09% | 0.34% | -0.15% | -0.21% | -0.18% | -0.52% | -0.05% | |
| NZD | -0.54% | 0.86% | 0.37% | 0.32% | 0.36% | 0.54% | 0.47% | |
| CHF | -1.04% | 0.39% | -0.11% | -0.16% | -0.13% | 0.05% | -0.49% |
The heat map shows the percentage changes of the major currencies against each other. The base currency is chosen in the left column, while the quote currency is chosen in the top row. For example, if you choose the Euro in the left column and scroll down the horizontal line to the Japanese Yen, the percentage change that appears in the box will represent EUR (base)/JPY (quote).
After Wednesday's fall, the Gold gained bullish momentum and gained more than 1.5% on Thursday. XAU/USD continues to rise, reaching a new all-time high near $2,400.
The European Central Bank (ECB) left its monetary policy unchanged, as expected, after the April meeting. Even though that him EUR/USD managed to erase some of its daily losses during American trading hours on Thursday, came under renewed bearish pressure early on Friday amid dovish comments from ECB officials. The pair settled at its lowest level since December, below 1.0700.
The United Kingdom's Office for National Statistics reported on Friday that the Real Gross Domestic Product (GDP) grew 0.1% monthly in February. This reading followed the 0.3% growth recorded in January and was in line with market expectations. He GBP/USD remains lower on the data and trades at a new 2024 low near 1.2500.
He USD/JPY remains relatively calm above 153.00 early Friday. The Japanese Yen appears to benefit from the deterioration of the risk climate. Additionally, investors could be holding back from betting on another move higher in the pair amid rising expectations of Bank of Japan intervention.
Risk Sentiment FAQ
What do the terms “risk-on” and “risk-off” mean when referring to sentiment in financial markets?
In the world of financial jargon, the two terms “risk appetite (risk-on)” and “risk aversion (risk-off)” refer to the level of risk that investors are willing to bear during the investment period. reference. In a “risk-on” market, investors are optimistic about the future and are more willing to buy risky assets. In a “risk-off” market, investors begin to “play it safe” because they are worried for the future and, therefore, buy less risky assets that are more certain to provide a return, even if it is relatively modest.
What are the key assets to follow to understand risk sentiment dynamics?
Typically, during periods of “risk appetite”, stock markets rise, and most commodities – except gold – also appreciate as they benefit from positive growth prospects. The currencies of countries that are large exporters of raw materials strengthen due to increased demand, and cryptocurrencies rise. In a “risk-off” market, Bonds – especially major government bonds – rise, Gold shines and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar benefit.
Which currencies strengthen when sentiment is “risk-on”?
The Australian Dollar (AUD), Canadian Dollar (CAD), New Zealand Dollar (NZD) and minor currencies such as the Ruble (RUB) and the South African Rand (ZAR) tend to rise in markets where there is “appetite for risk.” This is because the economies of these currencies rely heavily on commodity exports for their growth, and these tend to rise in price during periods of “risk appetite.” This is because investors anticipate higher demand for raw materials in the future due to increased economic activity.
Which currencies strengthen when sentiment is “risk averse”?
The major currencies that tend to rise during periods of “risk aversion” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The Dollar, because it is the world's reserve currency and because in times of crisis investors buy US public debt, which is considered safe because it is unlikely that the world's largest economy will go into default. The Yen, due to the increase in demand for Japanese government bonds, since a large proportion is in the hands of domestic investors who are unlikely to get rid of them, even in a crisis. The Swiss franc, because strict Swiss banking legislation offers investors greater capital protection.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
