Forex Daily Recap – The Greenback Rose On Weaknesses In Major Currencies

USD Index

The USD Index opened on Thursday morning in green after major central banks reported a dovish outlook to their monetary policy last day. ECB prez Mario Draghi mentioned that the global economy remains down-tilted amid concerns of a sluggishness. Reserve bank of New Zealand hinted yesterday about a possible rate cut in the near time in this year. All these weak currencies helped the USD index to uplift reaching fresh highs. The USD index that measures the greenback against the six major currencies gained 0.50 percent reaching 96.770 level at 17:01 GMT.

Optimistic US-Sino talks helped the USD index to elevate but weaker GDP numbers limited the gains. US GDP number for the fourth fiscal quarter recorded 2.2 percent growth which was below the consensus estimate of 2.4 percent. Albeit the index is shining now, risks of rebounds in the US bond yields still exist.

EUR/USD

The EUR/USD continued tumbling for the third day. Uplifting USD Index was one of the reasons behind the plunge. The pair touched fresh lows of 1.1213 level during the day. German flash Consumer Price Index (CPI) numbers reported below the consensus estimate. From the US front, the GDP for the fourth fiscal year was released. The result was even below the bearish market expectation. USD Index plummeted with the release of these poor numbers leading to the upliftment in the pair level.

GBP/USD

Connor Campbell, an analyst at Spreadex, said: “With no clear way out of the Brexit labyrinth in sight, sterling struggled out of bed on Thursday.”

During the early session, the Cable rose slightly underpinned the slump of the USD Index. The GBP/USD then continued tumbling in the middle of Brexit chaos. Yesterday there was no majority for any of the eight alternatives to the May’s deal for a Brexit. May reminded the MPs in the UK House of Commons that she might step down from her premiership position if they accepted her deal for a Brexit. European Union had already provided the UK a deadline until April 12 to finalize a perfect offer soothing both the parties involved.

If there is no particular deal with a majority until the deadline specified, chances of a hard Brexit or an extension to the Brexit might take place. This uncertain nature of the Britain exit process pushed down the GBP/USD touching newer low levels.

USD/JPY

During the morning session, the USD/JPY plunged from 110.33 reaching 110.02 level which was the lowest for the pair during the day. The pair skyrocketed from that support levels touching fresh highs for the day of 110.85 levels. USD/JPY was seen to come down again reaching 110.53 levels.

AUD/USD

In response to the last day’s steep fall in the NZD/USD following a rate cut statement, the AUD/USD was seen to bleed in the morning trading session. The pair created a three-days low level touching the support point of 0.7064. With the escalation with USD Index, the pair stayed in the lower vicinity of the day. Thursday was a day of massive fall for the pair since the start of the week.