The US dollar’s weakness offered a boost to emerging-market currencies and oil.
Daily News: the AUD in troubles
- Yesterday the Federal Reserve released the meeting minutes. The general sentiment was hawkish: the central bank anticipates a strong economy. However, the officials of the bank see the escalation of trade wars as a big threat for the economy. Fortunately for the USD, the market was satisfied with an optimistic outlook on the economy that means further rate hikes, so the USD has been rising today. On Friday, the Fed’s Chairman Mr. Powell will give a speech at the Jackson Hole Symposium. Be careful, the USD may be volatile.
The US dollar index rebounded from the support at 95 yesterday and up to now, it has been trading near 95.30. No important economic data will be released today. However, the direction of the index will be determined by news on the NAFTA deal and trade talks with China. The supports are at 95 and 94.25. The resistance is at 95.50.
- Lots of news on the AUD.
The Australian dollar has been moving down because of several reasons. First of all, the USD has been strengthening. Secondly, the environment in the Australian government is critical. The prime minister announced a possibility of the resignation. The Australian parliament is shut down for 2 weeks. 3 minister applied for the resignation. Thirdly, the China-Australia relationship has worsened. Australia banned China’s Huawei company from participating in mobile network build.
As a result, AUD/USD has been moving down. The first support lies at 0.7275. If the USD is stronger, the pair will break below this level. The next support is at 0.7235. If the USD suffers to go further up, the pair will trade within 0.7275-0.7350.
- We got news that the UK will impose tariffs on the EU imports in the case of no deal. Moreover, today the Brexit Secretary will publish plans on how to keep the economy in case of no deal. No deal is a bad scenario for the GBP. However, if the government is ready for that, it won’t affect the GBP a lot.
Up to now, GBP/USD has been moving down. The pair rebounded from the resistance at 1.2910 (the pivot level and the trend line). The support is at 1.2828. If the USD drops. The pair will come back to the resistance.
- It’s not a secret that Mr. Trump is a great driver of markets.
As a result, the ZAR fell against the USD. However, the strengthening of the US dollar was an important reason for the USD/ZAR pair’s rise as well. The pair has rebounded from the support at 14.13. The resistance is at 14.4660 (50-hour MA), the USD needs additional support to break above this level and move to the next one at 14.6020.
That’s all for today! Follow market news with FBS!
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.