 Good morning to your daily news update from the Frankfurt office of CMC markets the dollar yen dropped sharply yesterday Eurodollar went up sharply yesterday. There was a an interesting speech from William Dudley He is the Fed president of New York He actually said this week that zero percent is the natural interest rate So if he thinks that is right, and if you assume this is right then the current Monetary policy by the Federal Reserve is only mildly accommodative and he also said that he given the weak world economy the Federal Reserve will need to Be more dovish in the current environment and that would mean that yeah, it would be a good environment for gold and silver which is trying to break out of a Consolidation overnight this morning to the upside so there are still buyers in the price of gold Which is a safe haven given the weakness in stocks so if you Take a closer look and if you dig deeper in the speech that William Dudley has made he said that okay the Federal Reserve needs to be more dovish and That needs to be done to prevent the US dollar from appreciating any further Goldman Sachs has taken a look at that speech and their interpretation is that the Federal Reserve might Open a new chapter in their monetary policy To do some sort of US dollar targeting That would mean if the dollar is going stronger is appreciating Then the Fed is or would in such a scheme try to be more dovish to weaken the US dollar again The world economy right now is is is weak and everyone is trying to Have solutions for tackling that weakness if you look at Japan they have just issued or just passed an economic program which is financed on debt and The Bank of Japan has also promised to do more to Yeah stimulate growth in Japan But the effect that it had is that the yen is going stronger dollar yen It's just close of dropping below 100 might come if you like Take the trend line Which is clearly down so the US dollar versus the yen could drop further If you look at the European monetary policy, then you see that Mario Draghi is clearly Targeting euro dollar and the euro it should not go or appreciate too far unless There is some growth which is not there yet. So if the euro is going up It would be a very negative for the export economy of the euro zone And so every central bank from the Bank of Japan to the European central bank. They all want weak currencies But it was only the exception that the Fed reserve was willing to accept a stronger dollar by now So the US dollar is in a bull market since the year 2005. It has been appreciating since then But if you look at the profit Growth or profit development of US companies Six quarters in a row the profits are twinkling and are going down So one reason of that might be the strongest dollar So it might very well be the case that the Fed is Somehow working on a concept to do some sort of dollar targeting and that would mean that The Fed would go more dovish and that would open a feedback loop to other central banks like the European central bank or the Bank of Japan Which by itself needs to do more and open the floodgates of money even further So that is something that needs to be watched a possible High in the euro dollar or in the US dollar a possible low in euro dollar If you look at the weekly chart in euro dollar at one one four fifty so one fourteen fifty US dollar per one euro. There is a major resistance Should euro dollar manage to close above that resistance on a weekly basis That would be a massive bisignal because for one and a half years if you look at the weekly chart Euro dollar has tried to break above one fourteen fifty But it didn't manage to close above that on a weekly basis Even though it tried nine times in the past one and a half years to do so So should it do so should it close at the end of one week above one fourteen fifty This would be a major bisignal Would that be possible? So Mario Tragi wants a weaker euro. Well, yes, it is possible. Look at Japan Japan tries to weaken the yen It has passed an economic stimulus program. It has increased its Monetary stimulus its fiscal stimulus They do everything they can but the yen is getting stronger So same could happen in euro in the euro zone. So praise for that any Upside on that would be very very positive for commodities Which profit from a week eight dollar so if euro dollar goes up normally commodities go up as well