Forex Today: Dollar buoyant ahead of Powell, UK PM Johnson’s COBRA meeting eyed
- 22nd September 2020
- Posted by: Hakeem
- Category: FOREX LATEST NEWS DAILY
Here is what you need to know on Tuesday, September 22:
The US dollar consolidated the surge to six-week highs, as the bulls took a breather amid holiday-thinned quiet trading and ahead of the US Federal Reserve (Fed) Chair Jerome Powell first of three appearances on Capitol Hill this week.
According to the prepared remarks released early Monday, Powell is expected to say that the Fed committed to using all tools available to ensure a strong recovery.
The uncertainty and delays in US fiscal stimulus combined with mounting coronavirus risks on the global economic recovery spurred the haven demand for the greenback at the expense of the risk assets.
The omnipresent US-Sino tensions also added to the downbeat market mood. The Global Times reported that Beijing is unlikely to approve the Tik Tok-Oracle deal, which is in-principally approved by US President Donald Trump.
Asian equities traded mostly lower, despite the easing of the Wall Street sell-off towards the closing. The US stock futures also traded on the back foot, reflective of the tepid risk sentiment.
Across the fx board, AUD/USD tested two-week lows sub-0.7200 after the Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle unveils four policy options, including currency intervention and negative interest rates. USD/JPY stabilized around 104.50 following the rejection near the 104.80 region.
EUR/USD remained under pressure above 1.1750 amid the virus resurgence and localized lockdowns in different countries in the Old Continent. The European Central Bank (ECB) President Christine Lagarde’s downbeat outlook on the economy also weighed on the shared currency.
GBP/USD’s rebound stalled above 1.2800, as traders await the Bank of England (BOE) Governor Andrew Bailey’s speech and UK Prime Minister (PM) Boris Johnson’s emergency COBRA meeting amid a spike in infections. A two-week nationwide lockdown could be on the table. Pubs and restaurants in England will be shut after 2200 hours.
Gold attempted a bounce on the $1900 level after Monday’s 3% slump. WTI licked its wounds below $40, in the face of rising concerns over global economic recovery.
Cryptocurrencies’ remained in downside consolidation mode, with Bitcoin hovering below the $10,500 level.