The US dollar continued to rise on Friday after Austria declared a full-fledged national lockdown because of the growing number of Covid-19 cases. Fears that additional virus restrictions across the Eurozone might stymie the recovery propelled the US dollar higher versus the euro, but it was also clear that haven-related buying helped the greenback in general.
The Australian and New Zealand dollars both lost over 0.60 percent to 0.7250 and 0.7000, respectively, as risk sentiment deteriorated. NZD/USD may find some support ahead of Wednesday’s Retail Sales report and RBNZ policy announcement. If the RBNZ does not raise interest rates to 0.50 percent, the NZD/USD could fall below 0.6900 this week.
Unless long-dated US rates start moving higher across the curve again, haven purchasing will support the yen, restricting USD/JPY gains. With anti-lockdown riots sweeping Europe over the weekend, the outlook for the single currency is bleak, even without factoring in the possibility of an economic downturn as a result. This week, EUR/USD could hit 1.1160, which could lead to a retest of 1.1000. GBP/USD continues to find support as a result of recent better-than-expected statistics, but it will continue to be hampered by its geographic relationship with the euro.
So far, the US dollar strength story has been validated largely in the G-10 sector, with Asian currencies maintaining stability, owing to the Chinese yuan’s ongoing appreciation.
Dollar Reaction As Biden Re-Nominates Jerome Powell
President Biden decided that re-appointing Powell would fulfill the President’s “dual duty” of maintaining monetary policy continuity while also safeguarding the Fed’s political independence. With inflation remaining substantially above the Fed’s objective, markets will be looking forward to the December Fed meeting to see if the central bank would speed up its tapering.
The news of Fed Chair Jerome Powell’s re-nomination for a second term as Fed Chair sparked a hawkish reaction in US bond markets. This isn’t so much because Powell is regarded as a hawk, but rather because Lael Brainard, the leading alternative candidate for the role, is regarded as far more dovish than Powell. Because a Fed led by Brainard is projected to keep rates lower for longer, the market’s hawkish reaction is primarily about pricing out this dovish risk.
- Broker
- Min Deposit
- Score
- Visit Broker
- Award-winning Cryptocurrency trading platform
- $100 minimum deposit,
- FCA & Cysec regulated
- 20% welcome bonus of upto $10,000
- Minimum deposit $100
- Verify your account before the bonus is credited
- Over 100 different financial products
- Invest from as little as $10
- Same-day withdrawal is possible
- Fund Moneta Markets account with a minimum of $250
- Opt in using the form to claim your 50% deposit bonus
Learn to Trade
Never Miss A Trade Again
Signal Notification
Real-time signal notifications whenever a signal is opened, closes or Updated
Get Alerts
Immediate alerts to your email and mobile phone.
Entry Price Levels
Entry price level for every signal Just choose one of our Top Brokers in the list above to get all this free.