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US Dollar May Be Bottoming

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Global equity markets declined after the Federal Reserve’s downbeat assessment of the near-term outlook for the U.S. economy. NASDAQ futures pulled back from its record high of over 10,000.

The Federal Open Market Committee yesterday said it sees gross domestic product shrinking 6.5% in 2020 but bouncing back to a 5.0% gain in 2021 followed by a 3.5% advance in 2022, both are well above the economy’s longer-term trend.

Jobless claims in the week ended June 6 were 1,542,000 when 1,565,000 were expected.

The producer price index increased 0.4% in May, which compares to the anticipated 0.1% gain.

In recent weeks, U.S. stock index futures have shown a tendency to bounce back from bearish news.


The euro is higher despite the belief that there could be increased political friction over the European Union’s aid package.

The euro is higher in spite of news that Italian April industrial production plunged.

The U.S. dollar appears to be bottoming and the euro currency appears to be topping.

In light of lower stock index futures, the flight to quality currencies, the Japanese yen and the Swiss franc are rallying.


Flight to quality buying is coming into the 30-year Treasury bond futures.

Some of the gains were due to the FOMC when yesterday policy makers assured investors that interest rates will stay near zero until the end of 2022.

Fed Chair Powell said policy makers are “not even thinking about thinking about raising rates.”

The Treasury will auction 30-year bonds today.

Now that the bullish FOMC news is out of the way, futures are likely to drift lower from the current higher levels.

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Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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