Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Greenback tacks on after Fed minutes
On Thursday, the evergreen buck generally strengthened versus its main rivals because the latest Fed minutes showed that further interest rate lifts are already in the pipeline. As for Australia’s currency, it went down against the backdrop of domestic political turmoil.
Tracking the greenback’s purchasing potential versus its primary rivals, the USD index managed to add up to 0.34% being worth 95.32. Yesterday, the index reached a minimum of 94.83, which is its lowest outcome since August 8.
The evergreen buck was underpinned after Fed policymakers told they still expect the American economy to further expand at an above-trend tempo, thus justifying further rate lifts.
The Fed minutes also disclosed that officials debated how global trade tensions could impact businesses as well as households.
The key US bank has had rates increased twice in 2018 and it’s anticipated to keep doing so. What’s more, another two lifts are supposed to take place before the years end.
The major US currency got an extra boost from the political crisis in Australia that suppressed the Australian dollar.
Malcolm Turnbull, Australian Prime Minister was clinging to power after several senior government ministers resigned in the face of a leadership downtime in the ruling Liberal party.
The currency pair AUD/USD slumped 0.82% hitting 0.7290, thus re-approaching the nineteen-month minimum of 0.7201 recorded on August 15.
Worries as for political risks surrounding US leader following the criminal conviction of two associates as well as concerns regarding US- China trade clashes also backed safe haven demand for the evergreen buck.
On Thursday, a fresh round of American duties on $16 billion of imports from China came into effect, followed instantly by the Chinese government slapping retaliatory duties on $16 billion of American imports to this Asian country.
The evergreen buck soared against Japan’s currency. The currency pair USD/JPY rallied by 0.22% reaching 110.79.
The currency pair EUR/USD slumped by 0.35% trading at 1.1554.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
The risk-on tone is back on the market again. Let’s look at main trading opportunities.