GBP/USD Is Struggling, The Aussie Pair Have Good Day And Is Trading Above 0.67$, The EUR/USD Is Trading Above 1.0650
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Data released by the US Bureau of Economic Analysis on Friday revealed that the Core Personal Consumption Expenditure (PCE) price index rose 0.2% m/m in November. The annual core PCE price index, the Fed's preferred measure of inflation, fell to 4.7% over the same period from 5% in October. Ahead of the Christmas break, Wall Street's major indices posted gains on Friday and failed to find demand for the US dollar.
China has said it will lift quarantine requirements for incoming visitors, further easing three years of border controls to contain COVID-19. China's reopening, which also entails a resumption of Chinese tourist outbound trips, will boost the consumer and service sectors outside the country, particularly in nearby Southeast Asia.
As a result, the dollar weakened significantly on Tuesday as most emerging Asian currencies strengthened and risk appetite.
Currencies in New Zealand and Australia also rose.
It is too early to tell how China's reopening will affect global economic activity, but there appears to have been a positive shift in risk sentiment after the three-day weekend.
Attention will also focus on the US economic report, which will include the October housing price index and November data on the balance of trade in goods. Investors, however, are likely to ignore these numbers and focus on risk perception.
USD/JPY
The yen's strength didn't last long and I'm already seeing a slight increase in USD/JPY today. Today, USD/JPY is back to trading above 133. The pair is trading around 133.30.
The weakness of the pair, however, does not excuse the recent mixed data from the US and Japan, let alone comments trying to challenge the political hawks at the Bank of Japan (BOJ).
That said, Japan's unemployment rate fell to 3.5% in November from 3.6% previously expected, while the jobs/apprentices ratio again printed 1.35 in the month in question compared to 1.33 market forecasts. Moreover, retail trade growth fell to 2.6%YoY against 2.8% of market consensus and 4.4% previously revised upwards.
EUR/USD
In recent days, the currency pair has been trading in a short range between $1.0580 and $1.0650. Currently, it is trading slightly above this range, signaling an uptrend.
EUR/USD has continued its move higher. The pair is taking advantage of US dollar weakness extensively as risk flows dominate further moves to reopen China.
Taking advantage of the weakness of the US currency, the EUR/USD pair is up today and is trading around 1.0650, mostly just above that level.
Today's high level so far has been 1.0671.
GBP/USD
GBP/USD lost its bullish momentum after encountering resistance near 1.2100 early in the European session on Tuesday.
GBP/USD drops towards 1.2050 on light trading as UK markets are closed for Christmas. The pair is downplaying the risk sentiment surrounding China that is weakening the US dollar.
China announced earlier in the day that it would lift quarantine requirements for travelers from January 8 as part of its reopening efforts. Over the weekend, Chinese officials said they would stop publishing daily revisions to the number of confirmed coronavirus cases.
It is worth noting that the valuation of the US dollar through risk perception should continue to drive the pair's actions.
Today, the situation of the cable pair is downside with the current trade at 1.2036.
AUD/USD
The Aussie trades in a strong tone on Tuesday, supported by positive market sentiment. The pair is rising for the third day in a row, extending its rebound from 0.6650. It is currently trading at 0.6737.
Source: investing.com, finance.yahoo.com
Data released by the US Bureau of Economic Analysis on Friday revealed that the Core Personal Consumption Expenditure (PCE) price index rose 0.2% m/m in November. The annual core PCE price index, the Fed's preferred measure of inflation, fell to 4.7% over the same period from 5% in October. Ahead of the Christmas break, Wall Street's major indices posted gains on Friday and failed to find demand for the US dollar.
China has said it will lift quarantine requirements for incoming visitors, further easing three years of border controls to contain COVID-19. China's reopening, which also entails a resumption of Chinese tourist outbound trips, will boost the consumer and service sectors outside the country, particularly in nearby Southeast Asia.
As a result, the dollar weakened significantly on Tuesday as most emerging Asian currencies strengthened and risk appetite.
Currencies in New Zealand and Australia also rose.
It is too early to tell how China's reopening will affect global economic activity, but there appears to have been a positive shift in risk sentiment after the three-day weekend.
Attention will also focus on the US economic report, which will include the October housing price index and November data on the balance of trade in goods. Investors, however, are likely to ignore these numbers and focus on risk perception.
USD/JPY
The yen's strength didn't last long and I'm already seeing a slight increase in USD/JPY today. Today, USD/JPY is back to trading above 133. The pair is trading around 133.30.
The weakness of the pair, however, does not excuse the recent mixed data from the US and Japan, let alone comments trying to challenge the political hawks at the Bank of Japan (BOJ).
That said, Japan's unemployment rate fell to 3.5% in November from 3.6% previously expected, while the jobs/apprentices ratio again printed 1.35 in the month in question compared to 1.33 market forecasts. Moreover, retail trade growth fell to 2.6%YoY against 2.8% of market consensus and 4.4% previously revised upwards.
EUR/USD
In recent days, the currency pair has been trading in a short range between $1.0580 and $1.0650. Currently, it is trading slightly above this range, signaling an uptrend.
EUR/USD has continued its move higher. The pair is taking advantage of US dollar weakness extensively as risk flows dominate further moves to reopen China.
Taking advantage of the weakness of the US currency, the EUR/USD pair is up today and is trading around 1.0650, mostly just above that level.
Today's high level so far has been 1.0671.
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GBP/USD
GBP/USD lost its bullish momentum after encountering resistance near 1.2100 early in the European session on Tuesday.
GBP/USD drops towards 1.2050 on light trading as UK markets are closed for Christmas. The pair is downplaying the risk sentiment surrounding China that is weakening the US dollar.
China announced earlier in the day that it would lift quarantine requirements for travelers from January 8 as part of its reopening efforts. Over the weekend, Chinese officials said they would stop publishing daily revisions to the number of confirmed coronavirus cases.
It is worth noting that the valuation of the US dollar through risk perception should continue to drive the pair's actions.
Today, the situation of the cable pair is downside with the current trade at 1.2036.
AUD/USD
The Aussie trades in a strong tone on Tuesday, supported by positive market sentiment. The pair is rising for the third day in a row, extending its rebound from 0.6650. It is currently trading at 0.6737.
Source: investing.com, finance.yahoo.com
