Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

U.S. Dollar Stays Steady

Published 06/24/2021, 04:36 AM
Updated 03/05/2019, 07:15 AM

The US dollar retreated initially overnight on soft US data and some dovish Fed-speak. US housing starts and services PMIs, were weaker than expected. Along with dovish remarks from Fed member Bowman, this led to a modest risk-on rally which pushed the dollar lower.

However, later in the day, hawkish rhetoric from Messrs. Bostic and Kaplan abruptly reversed that course, with gold sharply reversing gains and the US dollar rallying in the same manner.

The dollar index fell to support at 91.50, its 200-day moving average (DMA), before hawkish comments from Fed officials Bostic and Kaplan abruptly turned its direction higher. The dollar index finished the day 0.10% higher at 91.78.

Similar moves were mirrored by the major currencies, with EUR/USD and GBP/USD rallying before retreating to finish almost unchanged.

AUD/USD and NZD/USD rose around 0.35% to 0.7575 and 0.7050 and managed to hold onto these gains, reflecting the mixed views on risk sentiment at the moment. Both antipodeans are clinging onto their 200-DMAs, suggesting further gains if US data is softer tonight and the greenback falls.

USD/JPY peeped above 111.00 overnight and remained there this morning after US yields firmed slightly overnight. However, it lacks momentum still, and I suspect US yields will need to move directionally higher for USD/JPY to sustain itself at these levels. The pair remains a yield differential play.

US/Asia continued to drift higher after the PBOC, once again, set a weaker yuan to fix versus the US dollar this morning. With onshore USD/CNY at 6.4805 and offshore USD/CNH at 6.4825, both pairs have now closed above their respective 100-DMAs.

Notably, this week, USD/Asia has not managed to retrace any of its US dollar losses, suggesting once again, regional markets are still susceptible to taper-speak, and hawkish Fed official-speak.

With the PBOC seemingly signaling it wants a weaker yuan, the downward pressure will remain on Asian currencies as a whole for now.

Original Post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.