Stocks and Commodity Currencies Drop as Caution Returns to Wall Street

Fundamental analysis of Forex market

The best post-Christmas rally is over and most of the gains are already gone. Europe returned to the markets and traded mix. What was discerning for the equity rebound was that it did not take to the news that China and US will hold mid-level talks on the week of January 7th. Expectations are for the US to increase their demands and intensify the trade war. Today, the US Senate will convene and vote on a bill to end the partial government shutdown.

The Dow fell over 300 points at the open, lower by 1.3% and giving back almost a third of yesterday’s surge. The dollar also rallied against the commodity currencies, with gains of over 0.5% against the Australian dollar, kiwi and loonie.

With the choppy conditions likely to persist until the new year, many will keep a close eye if the stocks can keep this bottom.

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