Dollar Kicks Week Off on Bad Footing
The US dollar ticked lower on Monday as risk flows from last week’s closing continued adding downside pressures. The beleaguered currency slipped last Friday amid fresh optimism that a US-Sino trade deal would come about “either way.”
Just days before the FOMC, market participants seem to be downplaying a data-dependent, patient Fed. Or perhaps, the appetite is prolonged over last week’s poor array of US data.
Moreover, Congress voted against funding Donald Trump’s wall last Friday. This provided equities traders with an easy flow in sizing up positions in the week commencing.
The US index is trading below 96.00, lower for the day. However, USDJPY maintains a steady rate near ¥111.500. Since the Bank of Japan kept interested rates unchanged citing a global economic slowdown, Yen is expectedly weaker.
Euro Relatively Bid
In Europe, the rising vacancy rates supported the positive tone, as they underpin an appreciation in wage growth. Despite being in contrast with Germany’s industrial production, unfilled jobs reached a record high at 2.3 percent.
The euro is bid against the dollar near $1.1350, up +0.25 percent compared to the daily open at $1.1320. However, vacancy rates in most eurozone countries are low, suggesting the sentiment is owned to a weaker dollar, and may only be short-lived.
Brexit Uncertainty Lingers as 3rd Vote Nears
In the UK, the pound is trading lower for the day as Theresa May’s attempts to win over MPs seem deficient.
Cable appreciated near the $1.33 psychological zone, but bears stepped in immediately following the rejection. GBP/USD is down 50 pips from its daily high and is expected to remain volatile.
The British PM has until either Tuesday or Wednesday to convince the Commons to support her deal.
Technicals Could Dominate
Without any major data on the spotlight for the rest of the session, the general mood could turn into pro-risk. In fact, many currency pairs have already made a good run to psychological levels during Asia and London.
Aussie has repelled away from the 71-cent barrier; Kiwi is retracing closer to 0.6850 and Yen is slowly back-pedaling from important activity levels.