Dollar weakens broadly overnight on Trump's attack on Fed's policy. It started after Bloomberg reported that Trump lamented Fed chair Jerome Powell for not being the "cheap-money" chair he expected. Then Trump reiterated his comments that he's "not thrilled" with interest rate hikes in Reuters interview. But this time, Trump hid the fact that rate moves at Fed were collective decision. And he embedded a lie in his language by blaming Powell for "his" raising of interest rates. The comments sent Dollar sharply lower, and the greenback extends decline in against all other major currencies. Gold rides on Dollar's weakness and rebounds to as high as 1194.71 so far. It's having sight on 1200 handle. But technically the key resistance is in 1211.65. Reactions in other markets are muted though. DOW gained 0.35%, S&P 500 rose 0.24% and NASDAQ added 0.48%. Asian markets are also generally higher. At the time of writing, Nikkei is up 0.34%, HK HSI up 0.48%, China Shanghai SSE is up notably by 1.43%, Singapore Strait Times up 0.07%. Technically, while Dollar is weak, EUR/USD and AUD/USD are far from structural resistance at 1.1745 and 0.7452 respectively. Thus, these two pairs are staying bearish. However, USD/JPY's fall now puts 109.36 key support in focus and break will indicate medium term reversal. Similarly, USD/CAD's decline also put 1.2916 support in focus and break will raise the chance of medium term reversal too. If happens, weakness in USD/JPY and USD/CAD could be early signal of more Dollar selloff ahead. |
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