21.11.2023: Asian currencies nudge greater on weaker USD. USDX, USD/JPY, AUD/USD, NZD/USD, USD/INR
As markets await right this moment’s launch of the Fed minutes and concentrate on the opportunity of a charge reduce as early as the primary quarter of 2024, the US greenback and Treasury yields are falling. Against this backdrop, the US foreign money has fallen in seven of the final eight classes. Early Tuesday, it hit new historic lows since late August close to 103.2.
The US greenback recovered some floor towards its G6 counterparts throughout Asian buying and selling. However, it stays within the bearish zone – between assist at 103.1 and resistance at 103.4. Analysts warn that the buck’s decline could also be short-lived. After all, the minutes of the Fed assembly might be printed right this moment through the US session.
These conclusions, which might be drawn by the markets on their foundation, can change into the primary drivers for the US greenback and its counterparts. So far, the buck is sustaining downward momentum, shifting towards the technical assist ranges of 102.8 and 101.9. The subsequent resistance is situated at 104.5.
Not solely has the greenback fallen to a three-month low towards different main currencies, nevertheless it has additionally seen sharp losses towards the yuan this week. The truth is that China’s central financial institution has constantly supported its foreign money.
Today, the regulator set the common ceiling for the yuan-dollar trade charge on the highest stage since August 7. In addition, the fixation of the Chinese central financial institution was supported by optimistic information for the nation’s economic system.
According to Bloomberg, the Chinese authorities will assist the crippling actual property sector, together with 50 actual property builders that might be eligible for financing. This information helped to spice up shares and investor sentiment.
As the US greenback and Treasuries weakened, the yen strengthened by greater than 0.5% and hit a seven-week excessive of 147.5. The greenback/yen pair stays underneath promoting strain for the fourth day in a row. While threat urge for food might undermine the yen’s safe-haven standing, the pair has thus far maintained its bullish momentum within the vary of 147.2-148.4.
Look on the charts of the US greenback index and the greenback/yen pair. Today they seem like twins! This confirms the truth that the Japanese foreign money relies on the minutes of the US central financial institution assembly.
If the minutes point out a dovish reversal, the speed of the Japanese pair will doubtless go down, particularly towards the backdrop of hypothesis that the Bank of Japan will virtually cease its adverse rate of interest coverage by the start of subsequent yr.
Oil costs, commodities, and the antipodean currencies benefited from the sharp fall within the US greenback. Today, the Australian greenback approached the highest of its intraday vary of 0.6553-0.6589 within the Asian session.
However, the aussie couldn’t consolidate close to that stage as its short-lived rally was based mostly on market sentiment, fears, and expectations of the Fed minutes. By the top of the Asian session, the aussie was buying and selling under 0.657, though it maintained upward momentum.
In common, the Australian foreign money’s rally continues for the third consecutive session. It is fueled by the Reserve Bank of Australia’s hawkish sentiment and the yuan’s appreciation. It additionally displays investor optimism in anticipation of further stimulus measures in China.
Compared to its Australian counterpart, the New Zealand greenback carried out higher right this moment. The Kiwi not solely ended the Asian session greater however examined new three-month highs close to 0.6075.
The New Zealand greenback can also be rising for the third consecutive session, remaining bullish throughout the vary of 0.6025 – 0.6080. However, some technical indicators are pointing to a reversal and a fall within the kiwi’s value.
Higher oil costs might restrict the Indian rupee’s upside potential. The foreign money has already misplaced a few of yesterday’s features. The greenback/rupee pair closed at a document low of 83.3 on Monday because the US greenback’s decline offset the rise in oil costs.
However, the Indian foreign money continues to be pressured by demand for US {dollars} from authorities and overseas banks, in addition to capital outflows because of costly commodities. As a consequence, the rupee has continued to strengthen towards the US greenback because the center of final week. The euro/rupee pair has risen to 91.25 from 88.99.
00:00 Intro
02:40 USDX
02:02 Yuan appreciation, actual property developer sector
02:54 USD/JPY
03:25 USDX’s chart and the yen’s chart in contrast
04:00 AUD/USD
04:59 NZD/USD
05:33 USD/INR
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