Forex Today: Dollar bends but doesn’t break
|Here is what you need to know on Tuesday, September 29:
The market kick-started the week with a better mood, in detriment of the greenback. However, the dollar’s intraday decline against major rivals seems a mere correction at this point, with no changes to the longer-term perspective.
EUR/USD remained below 1.1700, retreating from its daily high after ECB’s President, Christine Lagarde who said that the external value of the shared currency has an impact on inflation, adding that policymakers monitor FX movements. However, she added that the exchange rate of the local currency is not a policy target for the central bank.
The GBP/USD pair soared to 1.2929 but trimmed most of its gains ahead of the close. The pair got boosted by mounting hopes for a UK-EU trade deal, as representatives from both economies head into the ninth round of talks with cautious optimism. UK PM Johnson’s spokesman state that a deal is still possible while there remains much to be done. The British currency found additional support in comments from BOE’s Ramsden who dismissed chances of using negative rates in the near-term.
Speculation that the Chinese economy continues to recover fueled equities, mainly after China’s Ping An Insurance announced that it would increase its stake in Europe’s largest lender, HSBC. The news boosted bank-related shares globally.
Commodities benefited from the dollar’s broad weakness. Gold added some $30, advancing beyond $1,880.00 a troy ounce. Crude oil prices followed the lead, with WTI retaking the 40.00 level. The AUD and the CAD posted some modest gains against their American rival.
The focus now shifts to the first presidential debate that will take place late Tuesday.
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