The US dollar index advanced to the area of 103.25. Although in the early trade on Wednesday, the greenback eased its bullish momentum, it has still outperformed most of its rivals lately.
Against the basket of six major currencies, the dollar is holding near its highest level in six weeks. In the course of the Asian session, the US currency was consolidating inside a narrow price range between 103.1 and 103.3 ahead of an important news release in the US.
The dollar/yen pair has also entered a narrow range at the start of the session on Wednesday. At first, it was moving flat within the channel of 145.4–145.7. In the past nine months, the Japanese currency has depreciated against the US dollar to critical levels where currency interventions can be considered.
As the yen’s decline has been going on for four consecutive sessions, markets are anticipating potential intervention from Japanese monetary authorities. Yet, the only comment the market can turn to was from Japanese Finance Minister Shunichi Suzuki.
He said on Tuesday that authorities are not targeting absolute currency levels when it comes to intervening in the market. His comment echoed similar remarks made in the past, including right before an intervention last year.
As Japan’s GDP data turned out to be way above expectations, analysts shifted the critical level for the yen to 150 against the dollar. On Wednesday morning, the dollar/yen pair was trading at 145.5, staying within the red price channel.
As for the Australian dollar, it has also been trading in the red between 0.6428 and 0.6461 against the greenback. The deterioration of the Chinese market and its currency adversely affected the Aussie as its liquid proxy and sent it to the lows of November last year.
Besides, the Aussie is very sensitive to changes in risk sentiment which is why yesterday’s decline in Wall Street served as a bearish factor for it. In addition, falling oil prices put more pressure on the pair, extending its 7-day slide.
In the Asian session on Wednesday, the AUD/USD pair has retested its yearly low at 0.6430. Even if the sentiment in stock markets improves, the Aussie will continue its moderate decline.
For the New Zealand dollar, Wednesday became the time of a small triumph. After hitting the lows of November 2022 at 0.5933, the kiwi moderately recovered to the high of 0.5970. This is how the quote responded to the hawkish forecast from the Reserve Bank of New Zealand
On the daily chart, the kiwi/dollar pair was hovering between support at 0.5931 and resistance at 0.5982. Yet, its upside potential remains limited, at least until the US data and Fed minutes are out.
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00:24 Stock exchange
01:15 US Federal Reserve
02:02 Fitch Ratings
02:41 USDX
03:23 USD/JPY
04:54 AUD/USD
05:57 NZD/USD
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