The Us dollar is consolidating around fresh highs against a basket of major currencies on Thursday, following wild moves on Wednesday, triggered by fears and uncertainty on Trump’s victory of US 2016 election.

After initial panic reaction in global markets on a massive selloff in riskier assets, when markets digested news and traders started to understand the main targets of new administration which are higher economic growth and inflation, along with generous tax cuts and higher infrastructure and defence spending, markets made a dramatic turnaround.

The dollar and stocks quickly reversed all losses from Wednesday’s night and returned to the original direction.
Dollar index returned to the levels last seen at the end of October, turning Wednesday’s initial sharp fall into positive numbers at the end of the day. The dollar index ended trading on Wednesday 0.66% up, after losing over 2% earlier in the day.

The single currency ended day in red and loss of 1.06% after dramatic reversal from Wednesday’s peak at 1.1300 erased initial gains of 2.5%.
Japanese yen was among the top losers at the end of Wednesday’s business, ending day with gains of 0.49%, after earlier losses reached level of 3.77% at one point.
Dow Jones was up 1.22% on Wednesday’s close, after sharp rebound erased initial losses of nearly 5%.
S&P 500 index ended day with surplus of 1.03%, after paring overnight’s losses that fell below 5%.

US stock indexes continued to advance on Thursday, driven by positive sentiment, with Dow posting new record high and S&P approaching top at 2191, posted in August.
Speculation in markets that Trump would enact protectionist trade policies and put upward pressure on U.S. wages and raise inflation, boosted dollar and stocks.
Gold managed to close Wednesday’s trading positive, being up 0.24% at the end of the day and extended recovery by 0.86% in early European trading, after sharp $1267 / $1337 rally on Wednesday was almost fully retraced, as market returned to risk-on mode and the yellow metal lost its safe-haven appeal.

Asian shares rallied on Thursday as the dollar firmed in a remarkable snapback from the shock of Republican Donald Trump’s presidential victory a day earlier, however, the speed of the reversal surprised most of market participants.
MSCI’s broadest index of Asia-Pacific shares outside Japan bounced 2% after falling 2.4% a day earlier.
Japan’s Nikkei 225 was among the top performers, jumping 7% at one point, after 5% fall on Wednesday.
Positive sentiment spilled over into European stock markets that opened higher on Thursday.
Britain’s FTSE 100 is up 1% from opening; German DAX gained so far 0.53%, while French CAC40 index is up 0.39% in early Thursday’s trading.

Highlights of the day

Europe
French Non-Farm payrolls rose above expectations in Q3, coming at 0.3% vs forecast at 0.2%, identical to Q2 result.

America
US weekly jobless claims are expected to fall to 260K from previous week’s 265K. Data is due at 12:30 GMT.
FOMC member Bullard is due to speak at 14:15 GMT.

Important levels
USDJPY
The dollar posted marginally higher multi-month high against yen at 105.94 on Thursday, following Wednesday’s sharp fall to 101.17 and dramatic rebound that peaked at 105.87. The near-term picture remains unchanged, despite yesterday’s fall, as strong rally from Monday formed three long bullish daily candles that generated strong bullish signal. The pair eyes immediate resistance at psychological 106.00 barrier, followed by 106.50/70, with bullish acceleration capable of extending towards key short-term target at 107.47.
Initial support lies at 104.95, followed by 104.10 and 103.00 pivot.
Cable slid below 1.2400 handle on fresh bearish acceleration from last week’s peak at 1.2555, after Monday’s gap-lower opening. Weakness could extend to next strong support at 1.2330, as growing negative sentiment maintains downside pressure. Firm break below 1.2300 support would signal lower top at 1.2555.
Initial resistance lies at 1.2445, ahead of session high at 1.2496 and Friday’s intraday high at 1.2519.
GOLD
Near-term structure is weak, after yesterday’s spike to $1337 and subsequent sharp reversal that approached key near-term support at $1267. Overall picture shows mixed outlook, with today’s bounce seen as correction ahead of fresh push lower, as dollar is strengthening. Extension below $1267 will confirm bearish resumption towards $ 1260 support, with extension to key support T $1241 not ruled out.
Bearish tone is expected to dominate while the upper trigger at $1307 stays intact. Sustained break here would signal stronger bullish acceleration., Market Analysis