The U.S. Dollar (USD) index is in freefall. The DXY ETF is reflecting the four-year low in the currency, reached on Tuesday. To allay fears, President Trump called the currency “great.”
This is in response to the media asking the President if he thought the USD fell by too much. Global markets hedged their worries against the currency for over a year. Gold (GLD) prices are still rising, closing at $5,167. Silver (SLV) and copper prices are also strong. The metal rally, which includes lithium, is rewarding investors partly due to China.
China’s demand for silver and copper is increasing. It also limited the output of lithium, helping shares of Albemarle (ALB) perform well in the last year.
Fed Decision
At 2 p.m. today, the Federal Reserve will announce its rate policy. Even though markets expect the bank to hold interest rates, it is not helping to support the dollar. The more important development is Fed Chair Powell’s comments on the Justice Department opening an investigation against him. That case is unsettling currency markets. Long-term bond prices are slipping, while the U.S. dollar bullish fund (UUP) lost 2.72% in just the last week.
Watch out for asset managers like BlackRock (BLK), T Rowe Price (TROW), and Blackstone (BX) drifting lower. Weak demand for U.S. assets will hurt the profitability of those firms.
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