Connect with us

Economics

Pound, yuan firm up against US dollar

The US dollar weakens modestly as equities strengthen The overnight session on currency markets was a quiet one, with the rise in US equities flowing through to a modestly weaker US dollar. The dollar index fell 0.23% to 93.05, leaving it near the middle of its two-month range. The pro-cyclical euro, Australian and New Zealand […]

Share this article:

Published

on

This article was originally published by Market Pulse

The US dollar weakens modestly as equities strengthen

The overnight session on currency markets was a quiet one, with the rise in US equities flowing through to a modestly weaker US dollar. The dollar index fell 0.23% to 93.05, leaving it near the middle of its two-month range. The pro-cyclical euro, Australian and New Zealand dollars all edged higher, but again, remain mid-range for now. The USD/JPY fell 50 points to 105.70 after Mr Suga’s anointment as the new Japan Prime Minister. However, USD/JPY lacks momentum, and further falls are likely to be limited to the 105.00 area at best.

GBP/USD rose 50 points to 1.2845 overnight, as senior UK Conservatives railed against the first passage of the Internal Markets Bill. Notably, though, GBP/USD tested and failed, at resistance at 1.2905 intra-day. That should be a warning sign that sterling faces a challenging environment now, with Brexit risks nowhere near priced into currency markets. Rallies look there to be sold in this environment, with critical support formed by the 100 and 200-day moving averages, (DMA’s), at 1.2700 and 1.2730. A daily close below this region is a harbinger of much deeper losses.

On the back of impressive Chinese data, and firm USD/CNY fixings by the PBOC, which is also maintaining tight domestic liquidity, the Chinese yuan firmed to levels last seen in early 2019 today. China Industrial Production rose to 5.6%, up from 4.8% and above the forecast of 5.1%. Retail Sales showed a gain of 0.5%, its first gain in seven months.

USD/CNY has fallen 0.30% this morning to 6.7890, having almost wholly ignored US dollar strength last week. Although slightly oversold now, USD/CNY’s momentum remains undiminished. Further CNY strength pushing USD/CNY down to the 6.6700/6.7000 regions cannot be ruled out.

Except for the GBP and CNY, currency markets continue to range trade ahead of the FOMC rate decision later this week.

us dollar

Share this article:

Economics

Maxine Waters Confirms Bankman-Fried Will Testify Virtually Next Week… Alongside Current FTX CEO

Maxine Waters Confirms Bankman-Fried Will Testify Virtually Next Week… Alongside Current FTX CEO

Update (1830ET): The House Financial Services…

Share this article:

Continue Reading
Economics

5 Principles Of Stagflation

5 Principles Of Stagflation

Authored by Jeffrey Tucker via The Epoch Times,

Stagflation is the combination of slow or falling economic output…

Share this article:

Continue Reading
Economics

Week Ahead – Blockbuster end to the year

US Two blockbuster events will have Wall Street on edge as the disinflation trade may have gotten ahead of itself. The last major piece of economic news…

Share this article:

Continue Reading

Trending