Market remain unstable AUDUSD EURUSD
AUD/USD🔼
USD/CAD🔼
GBP/USD🔼
USD/JPY 🔽
NZD/USD🔽
EUR/USD🔼
USD/CHF🔽
Tuesday's trading session was marred by choppy, unexpected trading conditions for the second consecutive day. The S&P 500 is still trading in the red ahead of the US close. Still, it has rebounded sharply from earlier session lows, providing a sense of foreboding following yesterday's fierce late-session rally. As a result of the recent sensitivity of G10 FX markets to equity market volatility, the net result is a somewhat pro-risk bias. The Dollar Index (DXY) is slightly higher on the day but has retreated from previous highs in the 96.20s to trade below the significant figure.
The USD shrugged off mixed Consumer Confidence data. The headline index fell marginally but not as much as feared due to inflation and pandemic (Omicron) fear, and somewhat faster than expected home price increase in November. Markets' primary focus is on
1) Wednesday's Federal Reserve meeting and
2) geopolitics, both of which have been cited as reasons for risk asset underperformance and increased safe-haven demand.
However, one day ahead of what is projected to be an extremely hawkish Fed meeting (the Fed is predicted to approve multiple raises and QT in 2022), the most risk-sensitive G10 currencies performed nicely.
The Australian and Canadian dollar both gained roughly 0.3 percent on the day against the dollar, relegating them to second and third place in terms of G10 performance, trailing the high beta NOK, which gained 0.5 percent. The Australian dollar rebounded over 0.7150/$ on hawkish RBA wagers following a hotter-than-expected Q4 2021 Consumer Price Inflation report that will have surprised the central bank.
Hawkish central bank wagers are also bolstering the loonie. A minority of experts expect the Bank of Canada to surprise the market on Wednesday with a 25 basis point rate hike. Rather than that, the bank is more likely to adjust its forward guidance on rate hikes to reflect the current run of positive economic indicators, implying a rate hike is imminent in March.
GBP/USD was another risk-sensitive G10 currency that performed well on Tuesday, with GBP/USD returning above the 1.3500 level as FX markets continue to disregard the uncertain political backdrop in the United Kingdom. With London police investigating charges that Downing Street parties violated lockdown rules, Boris Johnson's position as Prime Minister appears precarious.
In terms of the rest of the G10 currencies, the JPY and NZD were flat against the dollar on the day, with USD/JPY trading just below 114.00 and NZD/USD trading just below 0.6700 ahead of December New Zealand trade numbers.
Despite positive German Ifo survey findings released during the European morning, the euro fell 0.2 percent against the dollar, with EUR/USD harmed by technical selling following a fall below a significant long-term uptrend in play since late November. The pair is currently trading around 1.1300, rebounding from earlier lows in the 1.1260s, its lowest level in almost a month.
Finally, CHF was the day's notable G10 underperformer, with EUR/CHF appreciating 0.4 percent to the 1.0375 range and USD/CHF gaining 0.6 percent to reach 0.9200 for the first time in almost two weeks amid speculation regarding SNB intervention.
Find more on Mitrade.
#Mitrade #DollarIndex #YieldCurve #Inflation #Gold #USDJPY #EURUSD #GBPUSD
USD/CAD🔼
GBP/USD🔼
USD/JPY 🔽
NZD/USD🔽
EUR/USD🔼
USD/CHF🔽
Tuesday's trading session was marred by choppy, unexpected trading conditions for the second consecutive day. The S&P 500 is still trading in the red ahead of the US close. Still, it has rebounded sharply from earlier session lows, providing a sense of foreboding following yesterday's fierce late-session rally. As a result of the recent sensitivity of G10 FX markets to equity market volatility, the net result is a somewhat pro-risk bias. The Dollar Index (DXY) is slightly higher on the day but has retreated from previous highs in the 96.20s to trade below the significant figure.
The USD shrugged off mixed Consumer Confidence data. The headline index fell marginally but not as much as feared due to inflation and pandemic (Omicron) fear, and somewhat faster than expected home price increase in November. Markets' primary focus is on
1) Wednesday's Federal Reserve meeting and
2) geopolitics, both of which have been cited as reasons for risk asset underperformance and increased safe-haven demand.
However, one day ahead of what is projected to be an extremely hawkish Fed meeting (the Fed is predicted to approve multiple raises and QT in 2022), the most risk-sensitive G10 currencies performed nicely.
The Australian and Canadian dollar both gained roughly 0.3 percent on the day against the dollar, relegating them to second and third place in terms of G10 performance, trailing the high beta NOK, which gained 0.5 percent. The Australian dollar rebounded over 0.7150/$ on hawkish RBA wagers following a hotter-than-expected Q4 2021 Consumer Price Inflation report that will have surprised the central bank.
Hawkish central bank wagers are also bolstering the loonie. A minority of experts expect the Bank of Canada to surprise the market on Wednesday with a 25 basis point rate hike. Rather than that, the bank is more likely to adjust its forward guidance on rate hikes to reflect the current run of positive economic indicators, implying a rate hike is imminent in March.
GBP/USD was another risk-sensitive G10 currency that performed well on Tuesday, with GBP/USD returning above the 1.3500 level as FX markets continue to disregard the uncertain political backdrop in the United Kingdom. With London police investigating charges that Downing Street parties violated lockdown rules, Boris Johnson's position as Prime Minister appears precarious.
In terms of the rest of the G10 currencies, the JPY and NZD were flat against the dollar on the day, with USD/JPY trading just below 114.00 and NZD/USD trading just below 0.6700 ahead of December New Zealand trade numbers.
Despite positive German Ifo survey findings released during the European morning, the euro fell 0.2 percent against the dollar, with EUR/USD harmed by technical selling following a fall below a significant long-term uptrend in play since late November. The pair is currently trading around 1.1300, rebounding from earlier lows in the 1.1260s, its lowest level in almost a month.
Finally, CHF was the day's notable G10 underperformer, with EUR/CHF appreciating 0.4 percent to the 1.0375 range and USD/CHF gaining 0.6 percent to reach 0.9200 for the first time in almost two weeks amid speculation regarding SNB intervention.
Find more on Mitrade.
#Mitrade #DollarIndex #YieldCurve #Inflation #Gold #USDJPY #EURUSD #GBPUSD
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