U.S. Dollar Appreciates Amid Worsening Sentiment
02 Marzo 2021 - 1:21AM
RTTF2
The U.S. dollar appreciated against its major counterparts in
the European session on Tuesday, as risk sentiment turned sour amid
weaker commodity prices and as China's top banking regulator
expressed fears about bubbles in in financial markets.
Bubbles in US and European markets could burst because their
rallies are heading in the opposite direction of their underlying
economies and would have to face corrections "sooner or later," Guo
Shuqing, Chairman of the China Banking and Insurance Regulatory
Commission (CBIRC) and Party secretary of the central bank
said.
Guo's comments stocked concerns about further tightening in the
world's second-biggest economy.
Oil prices dropped amid worries that OPEC and its allies could
consider raising output when they meet later this week.
The Fed's dismissal of higher yields supported the dollar and
contrasted with the approach from other central banks.
Traders await a series of Fed speeches this week, culminating
with Powell on Thursday and the February U.S. employment report due
on Friday, which will provide an update on the speed and direction
of the nation's labor market recovery.
The greenback rose back to 106.91 against the yen, a pip short
of its Asian session's more than a 6-month high of 106.92. The
greenback is likely to face resistance around the 108.00 region, if
it gains again.
The greenback firmed to 1.1992 against the euro, its highest
level since February 5. Next key resistance for the greenback is
likely seen around the 1.18 level.
Preliminary figures from Destatis showed that German retail
sales decreased for a second straight month and at a faster than
expected pace in January.
Retail sales fell 4.5 percent month-on-month, which was worse
than the 0.3 percent decline economists had expected. In December,
sales decreased 9.1 percent.
The greenback spiked up to its strongest level since November
2020 versus the franc, at 0.9194. The U.S. currency is poised to
challenge resistance around the 0.94 mark.
The greenback approached near a 2-week peak of 1.3859 against
the pound, up from Monday's closing value of 1.3926. The next
possible resistance for the currency is seen around the 1.37
level.
Survey data from the Nationwide Building Society showed that UK
house price inflation accelerated in February, defying expectations
for further slowing.
The house price index rose 6.9 percent year-on-year following
6.4 percent rise in January. Economists had expected the rate to
ease to 5.6 percent.
In contrast, the greenback eased off to 1.2645 versus the
loonie, heading to pierce its Asian session's 4-day low of 1.2638.
The greenback may challenge support around the 1.25 mark.
The greenback dropped to a 4-day low of 0.7803 versus the
aussie, off its prior high of 0.7736. The greenback is seen finding
support around the 0.81 region.
Australia's central bank left its cash rate and asset purchase
programme unchanged and indicated that it will not raise the rate
until inflation returns to the target range.
The policy board of the Reserve Bank of Australia headed by
Governor Philip Lowe decided to hold its cash rate at a record low
of 0.10 percent.
The greenback retreated to 0.7266 versus the kiwi, following
near a 2-week high of 0.7209 seen earlier in the session. If the
greenback weakens further, 0.74 is possibly seen as its next
support level.
Looking ahead, Canada GDP data for the fourth quarter will be
published in the New York session.
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