In this article, we have covered the highlights of global market news about the USD/INR, AUD/USD, USD/CAD and USD/JPY.
USD/INR Price News: The Indian Rupee follows the bullish options market trend at 83.00.
As Indian Rupee (INR) sellers take a break before the important United States data on early Friday, USD/INR declines from the seven-week peak. Nevertheless, while maintaining its strength for a third consecutive week, the quotation prints slight losses close to 82.85 by publication.
The one-month risk reversal (RR) of the USD/INR, a measurement of the gap between call and put prices, prints the largest daily figure in one week. As a result, giving the pair information from the options market. The positive print of the weekly RR, which followed the negative marks of the previous week, also reflects the confidence of the USD/INR options market. The risk reversal percentage is 0.035 in both situations.
The recent decline in this pair may be related to the confidence around China’s pro-growth measures. The Sino-American scuffles, however, defy the strategy and put the pair sellers to the test.
As the USD weakens and risk sentiment improves, AUD/USD returns to the 0.6700 level.
The AUD/USD pair draws new purchasing at the 100-day SMA on Friday, preventing the decline from the previous day’s one-week high retracement. The pair maintains its intraday gains through the early European session and is trading close to the day’s high, just below the 0.6700 level.
The safe-haven US Dollar experiences some selling in response to a slight rebound, which is therefore seen as supporting the AUD/USD pair. Nevertheless, concerns about economic slowdowns brought on by an increase in new COVID-19 cases in China should temper any confidence in the markets and the risk-averse Australian dollar. In addition, resurgent concerns that the Fed would maintain its hawkish posture to contain inflation could restrain US Dollar losses and help to restrict the major.
USD/CAD remained below the mid-1.3600s due to a weaker US Dollar; the downside seems restricted.
The USD/CAD pair encounters new supply on Friday and fails to take advantage of the previous day’s somewhat positive recovery from a one-week low. The pair is now trading around the 1.3630-1.3625 band, towards the bottom end of its daily range, and is still depressed going into the European day.
Selling of the safe-haven US Dollar results from a minor rebound in US equities futures, which is thus seen as a major factor affecting the USD/CAD pair. However, given renewed expectations for a more aggressive Fed policy tightening and the favorable US macroeconomic data provided on Thursday, the US Dollar decline will likely be contained.
In reality, the third-quarter US GDP growth estimate was raised, indicating that the economy grew by 3.2% rather than the previously projected 2.9%. To make matters worse, for the week ending December 17, fewer Americans than anticipated filed new claims for unemployment-related benefits, indicating that the labor market is still tight.
USD/JPY consolidates in a range around the mid-132.00s, with an eye on US PCE data for further impetus.
The USD/JPY pair rose from the 131.65 regions the previous day and reached a three-day high on Friday, but there is insufficient bullish confidence. As traders eagerly await the US Personal Consumption Expenditure (PCE) data before making new directional bets, the pair manages to maintain stability in the mid-132.00s during the early European session.
The Core PCE Price Index, the Fed’s favored inflation indicator, is scheduled for publication later in the early North American session and will provide new indications of inflationary pressures. This should, in turn, significantly impact the Fed’s subsequent policy decision and assist in predicting the next leg of the US Dollar’s directional movement. Investors choose to stay out of the market as the big data risk approaches, which results in muted range-bound price activity around the USD/JPY pair.
While the global risk sentiment is improving, which tends to weaken the safe-haven Japanese Yen, the downside is still muted. Aside from this, the US dollar gains momentum, and the pair receives some support from a further increase in US Treasury bond rates, which is supported by betting that the Fed would tighten policy more aggressively. The positive US macro data reported on Thursday fanned concern that the US central bank would have to maintain its hawkish approach to control inflation, especially in light of the Fed’s more hawkish language from last week.
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