Dollar Gains Against Major Currencies Ahead Of Chinese And European Data
The US dollar is rallying against major rivals after kicking off the week on the back foot. In particular, the Australian dollar fell against the greenback by 0.4% to $0.7144. This came after the Reserve Bank of Australia (RBA) released minutes of its latest meeting. Also, the Euro slid against the dollar settling at $1.1297 in the Tuesday early morning trading session.
USD firming up against rivals
During the April meeting, the RBA reiterated its willingness to cut interest rates to give inflation a push upwards. Further, the institution said that increasing unemployment rates would live them with no alternatives but to adopt an expansionary policy. In announcing the possible policy directions, the RBA further acknowledged that the labor market is improving. Nonetheless, the central bank seems baffled by the fact that the economy is slowing.
Against the Euro, the EUR/USD exchange rate was solid after major gains last week. On Monday this week, the pair opened at 1.1303 and closed at 1.1305. This continues a trend that began at the beginning of this month. During the last trading session, the pair was 0.05% up at 1.1313.
The dollar index looking for direction
Despite the strong performance from the greenback, the dollar index is not showing any kind of decisiveness in regard to direction. On Monday, the US dollar index was flirting with values just under 97 where it settled at 96.495 as of 14:52 GMT.
On Tuesday, the index touched a tad above 97 but been fading below that handle. So far since markets opening today, the index is swinging in the middle of the 21-day and 10-day SMA. Notably, the gyration is as a result of risk appetite trends that are alternating and unsettled. Further, there is a possibility of trade conditions shrinking in the face of the approaching Easter Holidays.
In the meantime, the index is waiting on major data events to show solid movements in terms of going up or down. Some of the vital data events coming up include March’s Industrial Production data, the NAHB index, and the Manufacturing Production. Also, the head of the Dallas Fed will address a Community Forum in New Mexico this month, and he is likely to comment on the economy and interest rates.
Major data events coming up
Also, President Trump is not relenting on his criticism of the Fed as he quipped Friday that the institution is to blame for slowing U.S. growth. Further, the President directed another round of blame to the Fed’s rate hiking policy which, as per Trump, led to tanking stock prices. Nonetheless, the performance of the dollar seems unhurt by the comments as it remained flat.
However, the dollar is likely to show substantial moves in either direction in the coming days when the ZEW economic index data for Germany comes out. The data will help investors to make sense of the Eurozone economy. Also, investors are looking forward to the publication of economic growth estimate data from China today.