FOMC Hangover weighs heavy on USD
|AUD / USD
Expected Range: 0.7650 – 0.7780
The Australian dollar gapped higher through trade on Monday buoyed by wider USD softness following last week’s dovish FOMC monetary policy outlook. Punching through 0.77 the AUD moved through resistance at 0.7690 touching intraday highs at 0.7746. The Aussie then edged lower pulling back toward key technical resistance at 0.7730 and opens this morning at 0.7729. The hangover from last week’s dour outlook and propose slower rate of adjustment along the road to monetary policy normalisation forced the greenback lower as investors scrambled to correct positions and sell down USD longs. Safe Haven, emerging market and commodity currencies continued to benefit through trade on Monday as attentions turn to Today’s RBA minutes for renewed guidance into diverging central bank policy outlooks.
NZD / USD
Expected Range: 0.6975 – 0.7125
The New Zealand dollar traded in a tight range in local markets yesterday moving off support at 0.7010. Westpac consumer sentiment did little to move the Kiwi on open yesterday, while the NZ performance of services fell slightly but remains above its long term average. The Kiwi reached a high of 0.7070 as investors wait for the latest round of Global Dairy trade auction readings on Wednesday. The New Zealand Dollar opens steady at 0.7050.
GBP / AUD
Expected Range: 1.5930 – 1.6100
It was a quiet night for traders as the Great British Pound drifted lower from an intraday high against the Greenback of 1.2430. The Pound started its descend as more certainty overnight regarding Article 50 has come to the forefront of investors’ minds as Theresa May communicated to the European council that she will trigger Article 50 on March 29th. UK eagerly awaits this evenings inflation figures as previous noted by the British Chambers of commerce that inflation is predicted to reach 2.7% in 2018. Cable opens this morning at 1.2360.
USD, EUR, JPY
The U.S Dollar struggled to extend breaks above six week lows as the spectre of the Federal Reserve’s dovish undertone hangs heavy over the world’s base currency. The dollar retreated last week in the wake of the Fed’s interest rate hike as investors scrambled to adjust interest rate bets as the FOMC hinted a slower pace of monetary policy normalisation was appropriate and the inheritance of the incumbent sell off continued through trade on Monday. While comments from FOMC member Charles Evans, where in, the Chicago Fed President suggested the board was on track to raise rates twice through the year steadied the ship market participants appeared reluctant in reversing losses ahead a raft of key Fed Policy makers commentary. Attentions now turn to Fed president Janet Yellen on for a deeper insight into short term direction.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.