In this article, we have covered the highlights of global market news about the AUD/USD, USD/CAD, GBP/JPY and EUR/USD.
AUD/USD: The Australian dollar rises above the 200-day moving average on mixed China news and a lackluster mood.
As a short-term moving average protects the Australia Dollar buyers early on Monday morning in Europe, the AUD/USD currency pair oscillates around the round number of 0.6700. By doing this, the Australian currency pair illustrates the market’s cautious confidence despite slow movements and a light calendar. However, the first daily advances in three days are cheered by the pair purchasers thanks to the widespread US Dollar weakening.
News from China benefits purchasers of the AUD/USD. The AUD/USD has arguments to support the most recent recovery measures, whether the potential restoration of connections between Australia and China or China’s preparation for more stimulus. This week, Australian Foreign Minister Penny Wong will go to China, Prime Minister Anthony Albanese said on Monday, signifying an improvement in ties between Beijing and Canberra, according to Reuters. The news also said that Chinese President Xi Jinping and other officials committed on Friday to strengthen China’s ailing economy in the next year by pushing up policy changes to guarantee essential objectives are met.
Instead, concerns over China’s economic expansion and the validity of the most recent relaxation of Covid policy pose a problem for purchasers of the AUD/USD pair. It’s important to note that the People’s Bank of China (PBOCsupport )’s cheap money policy maintains the Australian dollar stronger because of the two countries’ extensive trading relations.
The US dollar does not support the Federal Reserve’s aggressive comments. As traders search for clear directions, the US Dollar Index (DXY) picks up bids from the intraday low but still records a daily loss of 0.15% at 104.60. The hawkish remarks from US Federal Reserve (Fed) officials and the weaker US PMIs for December may be the cause.
USD/CAD rises to 1.3680 as oil falls on a lackluster day, with Canada/US inflation set to rise.
Following a gloomy start to the week, USD/CAD consolidates intraday losses as it steadily climbs above 1.3680.
However, the Loonie pair’s first daily loss in three days and the optimism around Crude Oil seemed to have contributed to the US Dollar’s decline and the latest pacing back of movements despite a light calendar and conflicting worries.
As traders search for clear directions, the US Dollar Index (DXY) picks up bids from the intraday low but still records a daily loss of 0.15% at 104.60. The aggressive Fedspeak and weaker US PMIs for December may be the cause.
Despite this, Presidents of the Federal Reserve Banks of New York and Cleveland, Loretta Mester, and John Williams, recently supported higher rates. On the other hand, the US S&P Global Manufacturing PMI fell short of both market and analyst expectations and slipped to 46.2 from 47.7 in November. Additionally, the S&P Global Services PMI dropped from 46.2 in November and a market forecast of 46.8 to 44.4 in December’s flash estimate.
It should be noted that after initially rising to $75.93, the price of WTI crude oil, Canada’s principal export, has declined to $75.00. Nevertheless, the black gold reverses a two-day slump amid expectations for stronger Chinese demand and the US intention to repurchase oil for its national reserves.
GBP/JPY Price Analysis: Getting Closer to the 164.70 Support Confluence
In advance of Monday’s London opening, GBP/JPY bears continue to hold the reins, fading the day’s early rally below 165.20.
Nevertheless, the daily close below the 50-DMA of the cross-currency pair, together with the bearish MACD indications, favors GBP/JPY bears. The 100-DMA’s intersection with an upward-sloping trend line from November 11 around 164.70 is a difficult nut for the bears to break.
If the prices go below 164.70, the low from November at 163.00 can serve as an additional filter southward before revealing the 160.00 psychological magnets.
However, the GBP/JPY bears may have difficulties after October’s low at 159.75.
In contrast, recovery advances seem unlikely until the quotation shows a daily close above the 50-DMA level of 167.15.
The main obstacle to the upward will thereafter be a five-week-old horizontal resistance sector between 169.00 and 169.20. The 170.00 round number also serves as an additional filter.
EUR/USD below 1.0640 despite the US Dollar decline
Early on Monday in Europe, the EUR/USD oscillates around 1.0600 as it reverses a two-day slump.
The main currency pair’s most recent inactivity may be explained by the cautious outlook for this week’s US data and conflicting worries about European development. However, hawkish remarks from ECB members and the institution’s preparedness for higher rates give purchasers reason for optimism.
The European PMIs over the last week have outperformed the preliminary US activity data readings, supporting the ECB policymakers’ positive stance. Additionally, rumors that the bloc’s policymakers may loosen the restrictions on the oil price limit to adopt the resolution help to maintain the firmness of the EUR/USD exchange rate via expectations of higher oil prices and a greater need to rein in rising inflation.
But it’s important to remember that rising rates and concerns about inflation support Treasury bond yields, which entice US Dollar supporters during a lackluster day. The recent hawkish remarks from Fed members, particularly Federal Reserve Bank of Cleveland President Loretta Mester and New York Federal Reserve President John Williams, may have tempted the dollar buyers.
Please click here for the Market News Updates from 15 December, 2022.