Forex Today: Risk appetite takes its toll on the greenback

Valeria Bednarik FXStreet

What you need to know on Friday, September 24:

The market sentiment improved substantially, following news that Evergrande, the Chinese property giant, will likely be restructured to avoid default. Additionally, the local government is prepared to provide another kind of support, while a unit of the troubled company pledged to make an on-time interest payment.

The American dollar shed ground all the post-Fed ground and even fell further against most major rivals. HOWEVER, the EUR/USD pair held below its weekly high of 1.1755, as tepid European data spooked bulls.

The GBP/USD reached 1.3750 after a hawkish Bank of England announcement. The UK central bank left its monetary policy unchanged and the £895 billion facilities program on hold. The MPC voted 9-0 to leave rates on hold but voted 7-2 on reducing QE, while the statement noted that some developments strengthen the case for modest tightening. Still, policymakers said that uncertainties around the labor market remain but added that a rate hike would precede tapering.

The USD/JPY pair jumped to the 110.20 price zone, where it currently stands, amid a prevalent risk appetite. US Treasury yields soared to levels that were last seen in July, with the yield on the 10-year note hitting an intraday high of 1.411% and settling nearby. Wall Street rallied, with the DJIA adding over 550 points and the S&P adding roughly 1.4%.

Commodity-linked currencies were firmly up, following the lead of stocks. AUD/USD trades at around 0.7300, while USD/CAD is down to 1.2650.

Gold prices are sharply lower amid the upbeat mood, with the bright metal currently trading around $1,750 a troy ounce. Crude oil prices edged higher, with WTI settling at $73.10 a barrel.

Bitcoin bulls are going for the short squeeze and targeting $50,000 in the comeback

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.