empty
22.04.2025 01:07 AM
Panic hasn't gone anywhere – the dollar is being sold off, gold is rising, and the S&P 500 has turned downward again

The total speculative bearish position on the US dollar more than doubled over the reporting week, reaching -$10.1 billion. The Canadian dollar and the yen strengthened the most, while the euro's movement was slightly weaker—but in any case, it must be acknowledged: the dollar remains under heavy pressure.

This image is no longer relevant

Gold sets records almost daily, exceeding $3,400 per ounce—which is clearly not the limit. Even oil has resumed its growth despite the apparent shift toward safe-haven assets. This indicates that investors no longer view the US dollar as a safe haven.

Monday's sell-off was, as usual, triggered by the US President. In a Truth Social post, Trump called Federal Reserve Chair Jerome Powell a "major failure" and demanded an immediate start to rate cuts. According to Trump, inflation in the US has been virtually defeated, and any delay in rate cuts will lead to an economic slowdown—something he is trying to avoid at all costs. He must present the US as a reliable and attractive economy in his tariff war to stimulate capital inflows.

Moreover, Trump is reportedly considering firing Powell (whom he appointed himself) before the end of his term. This has sparked a new wave of sell-offs in US equity markets. The Fed doesn't want to rush. It has its plan and is sending signals intended to calm panic. Goolsbee stated that "short-term inflation expectations have increased, so we need to wait to see what happens next." At the same time, the yield on 5-year inflation-protected Treasury bonds (TIPS) has sharply declined in the past week—indicating the opposite trend.

The swap market has again priced in the possibility of four Fed rate cuts this year. Consequently, the dollar is losing support. Trump's plan to introduce new tariffs has not yet worked—China is refusing to make concessions and has even warned other countries against making deals with the US at their own expense.

It is unclear who will emerge as the winner—if there will be a winner. However, investors are buying gold instead of dollars, just in case.

Last week, we predicted that it wouldn't signal a reversal even if the S&P 500 rallied. On the contrary, it would be short-lived, as fundamental reasons continue to push the index downward.

This image is no longer relevant

And so it happened: the S&P 500, after a brief consolidation, once again headed south. The sell-offs are beginning to resemble panic again, and the 4,800 level no longer seems unreachable. Moreover, the long-term target has shifted to the 4,500 level. If a pullback occurs, it will likely be shallow—there are virtually no reasons to expect a sustained rebound.

Kuvat Raharjo,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Gold Rebounds as Fiscal Risks Resurface

Gold is swinging between extremes as spring draws to a close. The week ending May 16 was the worst for the precious metal due to optimism that, following a trade

Marek Petkovich 17:31 2025-05-23 UTC+2

AUD/JPY. Analysis and Forecast

Today, the AUD/JPY pair has started to attract buying interest, halting its pullback from the monthly high as demand for the Australian dollar emerges. Today's talks between U.S. Deputy Secretary

Irina Yanina 17:25 2025-05-23 UTC+2

USD/CAD. Analysis and Forecast

The pair is trending lower, dropping close to the key psychological level of 1.3800 amid broad-based U.S. dollar weakness. Traders have raised their expectations for Federal Reserve rate cuts following

Irina Yanina 16:43 2025-05-23 UTC+2

USD declares war on EUR

What's new is often just what's been forgotten. As spring draws to a close, the long-dismissed mantra "sell America" is making a comeback in markets. The phrase gained traction following

Marek Petkovich 14:59 2025-05-23 UTC+2

USD/JPY: what happens with yen?

The USD/JPY pair is experiencing heightened price turbulence. At the end of April, the pair sharply declined, hitting a 7-month low at 139.90. Then, last week, a northbound impulse pushed

Irina Manzenko 13:52 2025-05-23 UTC+2

Market Chaos to Continue (There is a likelihood of continued local declines in #USDX and gold prices)

Markets continue to act blindly amid the chaotic actions of Donald Trump, who is trying to pull the U.S. out of a deep, all-encompassing crisis like Baron Munchausen pulling himself

Pati Gani 10:19 2025-05-23 UTC+2

The Market Tucks Its Tail

A necessary project at the wrong time. The House of Representatives has approved Donald Trump's tax cut initiative. The President hopes it will help stimulate the economy and offset shortcomings

Marek Petkovich 09:29 2025-05-23 UTC+2

GBP/USD Overview – May 23: No Talks, but Hang in There

On Thursday, the GBP/USD currency pair traded relatively calmly, but like EUR/USD, it has been rising for two weeks. At first glance, one might wonder what reasons traders have

Paolo Greco 08:15 2025-05-23 UTC+2

EUR/USD Overview – May 23: The Rebellion Against the Dollar Continues

The EUR/USD currency pair traded relatively calmly on Thursday, yet it has risen significantly over the past two weeks. This movement can be interpreted in several ways. From a technical

Paolo Greco 08:15 2025-05-23 UTC+2

What to Pay Attention to on May 23? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic reports are scheduled for Friday. Only two are noteworthy: the final estimate of Germany's Q1 GDP and April's UK retail sales data. The German GDP report

Paolo Greco 05:58 2025-05-23 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.