Market Snapshot – Stock Market Rally Hits a Roadblock

Stock Market Rally Fizzles

The rally in the stock markets that we have seen over the last few days seems to be dying a slow death as the Asian markets closed in a mixed manner and the European markets are also in the red but not by much. The move up in the stock markets can be viewed more as a relief rally rather than anything else as the traders were relieved at the escalating tension between North Korea and the US lessen over the weekend. This helped the stock markets to recover and the recovery continued for the past few days fueled by the weakness in the dollar which meant that the next rate hike from the Fed would be further away than anticipated. But now that all the fundamentals have been priced in, the markets await the next direction from somewhere.

Dollar in Choppy Action

The dollar declined early in the morning today as a follow up of the decline which began just after the FOMC meeting minutes. Reports that Trump had disbanded the trade and policy council and the dovish tone of the minutes was enough to begin another round of dollar selling and that continued in the morning. But as the day wore on, the dollar reversed yet again as the euro slid and this has led to some choppy action in the currency markets for today as the traders wait on the sidelines and let the dust settle down before they pick one direction.