The trade: currency movements and trends in the commodities market
IG's Tony Sycamore explores the effects of US dollar strength, Aussie dollar stability, gold, and oil on ASX 200 and Nasdaq.
(AI video summary)
This video was created on 19 February for IG audiences by ausbiz.
Analysing currency movements and economic indicators
The currency market is active, with the United States (US) dollar strengthening against major currencies due to safe-haven bids amidst geopolitical tensions. The Australian dollar, however, remains resilient, holding near two-month highs. This stability follows the Reserve Bank of Australia (RBA) cutting interest rates and adopting a cautious outlook on future reductions.
Such moves often impact currency valuations, as seen here, where the Aussie dollar's strength reflects market confidence despite dovish signals from the RBA.
Gold as a safe haven
In the commodities market, spot gold prices are rising, climbing over 1% due to concerns about global economic growth. This precious metal often acts as a hedge against economic uncertainty, making it a focal point for traders.
Oil price fluctuations
Meanwhile, crude oil prices are trending higher, influenced by supply disruptions in Russia and the US. These factors contribute to the fluctuating dynamics of the commodities market, where geopolitical developments and economic indicators play significant roles in price movements.
ASX 200 and Nasdaq dynamics
Turning to the stock market, the ASX 200 is experiencing a pullback after a strong upward trend. This index, supported by major mining stocks and banks, recently hit new highs but is now facing resistance.
Traders are closely watching the support levels, particularly between 8350 and 8370, to gauge future movements. Across the globe, the Nasdaq 100 remains above 20,000, though it faces challenges as tech giants like Meta, Amazon, and Alphabet experience pullbacks.
The Nasdaq's ability to break through resistance levels between 22,000 and 22,200 will be crucial for sustaining its upward momentum.
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