Forex – dollar extends gains, Europe is in trouble

© Reuters. – The u.s. dollar has reached a new peak of eight weeks in the trade in Europe on Tuesday, while the announcement of the agreement to avoid a new shutdown of the government was overshadowed by persistent concerns about the trade war between the United States and China, and by discussions more bearish on Europe.

The dollar index, which compares the greenback to a basket of major currencies, rose for a ninth day after the head of the German central bank Jens Weidmann warned in a speech that the euro zone is still not proof “crises”.

One of the political risks the most obvious for the us economy have been lifted, the dollar remains the main currency supported by the short-term growth and the dynamics of interest rates. The euro, the pound sterling and the yen, on the other hand, are struggling to develop their tracks, in view of the problems of their national economy.

“We assess the risks of a recession, “technical” (in the euro area) to about one in three,” said the chief european economist of IHS Markit, Ken Wattret, in a research note.

However, he stated that”a severe recession remains unlikely, in the absence of the usual triggers, including the tightening of monetary policy and the financial tensions”.

The pound slid to a new low of three weeks, extending its losses after a series of data showing that the british economy was on the verge of collapse at the approach of the deadline to leave the european Union.

However, it has recovered some of its losses on Tuesday morning to climb to 1,2871 $.

The Swedish krona will be at the centre of discussions on Tuesday, and the market is waiting to know if the Riksbank believes to always be able to raise interest rates this year. The Swedish krona has lost 3% this year because of the worsening economic outlook, and it is not far off the lows of 10 years that she had known in January.

Elsewhere, the chinese yuan rebounded slightly, after falling Monday, while the USD / JPY pair has reached a new peak for 2019, 110,66, before returning to 110,58.

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