Forex Today: Dollar bulls take a breather amid an upbeat start to a Big week

Dhwani Mehta FXStreet

Here is what you need to know on Monday, September 28:

The US dollar extended Friday’s pull back from two-month highs, undermined by the improved risk sentiment amid optimism over the US fiscal stimulus and China’s economic recovery.

China’s industrial profits rose for the fourth straight month, suggesting the economic rebound is regaining momentum. Meanwhile, late Friday, US Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi agreed to restart formal talks on a new coronavirus fiscal aid.

Further, investors refrained from placing fresh long bets on the greenback, as the focus shifts to the first US Presidential election debate this Wednesday.

The Asian markets traded mostly higher while the US stock futures extended its winning streak into the third day on Monday.

Among other developments, the US District Court halts the Trump administration’s ban on TikTok downloads while US President Donald Trump dismissed the NY Times report as fake news. The US daily reported that Trump’s taxes show chronic losses and years of income tax avoidance.

Within the G10 fx basked, AUD/USD recaptured 0.7050, having extended the bounce from Friday’s lows amid the upbeat market mood. The kiwi also followed suit and regained 0.6550. New Zealand PM Jacinda Ardern said that a travel bubble with some of the Australian states could restart before Christmas. USD/JPY dropped back below 105.50, as the demand for the yen returned amid hopes of additional stimulus from Japan and subdued Treasury yields.

EUR/USD stalled its decline while holding steady above 1.1600. The bearish bias, however, remains intact, as the shared currency will continue to face the hear from the virus surge and restrictions in different Euro area economies. Also, the European Central Bank (ECB) policymakers’ concerns on the euro strength could weigh on the currency. All eyes on President Christine Lagarde’s speech due later on Monday.

GBP/USD bounced-back towards 1.2800 on renewed Brexit optimism. British diplomats are optimistic about reaching a post-Brexit transition trade deal with the European Union (EU). The UK Cabinet Minister Michel Gove visits Brussels ahead of the ninth round of talks this Tuesday, the final stage of Brexit trade negotiations.

Gold traded listless around $1860 ahead of the election debate and US payrolls release. WTI dropped 1$, below the $40 mark amid oil demand recovery concerns.

Cryptocurrencies’ broke the weekend’s consolidation to the upside, with Bitcoin challenging $11K.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD stays in tight channel near 1.1800

EUR/USD moves sideways in a narrow band at around 1.1800 in the second half of the day on Friday as investors refrain from taking large positions. February inflation data from Germany and January Producer Price Index figures from the US could drive the pair's action heading into the weekend.

GBP/USD struggles below 1.3500 amid UK political drama, BoE easing bias

GBP/USD struggles to build on the overnight modest bounce from the weekly low and oscillates in a narrow band below 1.3500 on Friday. The Gorton and Denton by-election, held on February 26, has become a focal point of political drama in the UK, along with the BoE easing expectations, acting as a headwind for the GBP.

Gold flat lines below $5,200; traders look to US PPI for fresh impetus

Gold struggles to capitalize on its modest gains registered over the past two days and trades below the $5,200 mark through the first half of the European session on Friday. Geopolitical risks remain in play amid a large US naval and air power buildup in the Middle East.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.