Forex Today: US dollar’s haven demand in vogue ahead of a busy day
- 23rd September 2020
- Posted by: Hakeem
- Category: FOREX LATEST NEWS DAILY
Here is what you need to know on Wednesday, September 23:
The US dollar continued to draw haven demand amid renewed US-China tensions and dwindling global economic recovery, as coronavirus resurgence rattled Europe and the UK. An optimism tone struck by the Fed policymakers and strong US housing data offered extra legs to the greenback rally.
Fed Chair Jerome Powell said the economy stands resilient throughout the crisis while the Chicago Fed President Charles Evans noted that the central bank could raise interest rates before the 2% average inflation target is reached.
The US-Sino tensions once again resurfaced after US President Donald Trump accused China once again before the United Nations General Assembly, holding it accountable for having “unleashed” COVID-19 on the world.
Asian equities were a mixed bag, albeit supported by the bounce on Wall Street overnight. The US stock futures traded with mild gains, as the dollar remained robust across the board.
AUD/USD was the weakest across the fx board, courtesy of the Reserve Bank of Australia (RBA) rate cut calls and Australian Retail Sales slump. NZD/USD briefly bounced from monthly lows of 0.6599 on the Reserve Bank of New Zealand’s (RBNZ) status quo on the interest rates and asset purchases. The RBNZ, however, flagged the prospects of negative rates, which clipped the kiwi’s rebound. USD/JPY kept the bid tone intact while holding steady just above the 105 level.
EUR/USD dropped to fresh two-month lows of 1.1675, as the shared currency remained undermined by rising growth worries, in the face of restrictions and localized lockdowns in many Eurozone economies amid surging virus cases. All eyes remain on the Eurozone Preliminary Manufacturing and Services PMIs.
GBP/USD held the lower ground on 1.2700 after UK Prime Minister (PM) Boris Johnson unveiled new restrictions while the Bank of England (BOE) Governor Andrew Bailey ruled out negative interest rates in the near-term. Brexit drama is back in the spotlight, as EU’s Barnier heads to London for informal trade talks. Sky News reported that the Brexit talks are going “a bit” better than expected.
Gold extended declines below $1900 ahead of the second day of Powell’s testimony on the virus impact. WTI traded in the red below $40 after a surprise rise in the API US crude inventories.
Cryptocurrencies’ traded subdued, with Bitcoin ranging around the $10,500 level.