USD Index Fall Escalated Selling Bias

Yen Breaks the 111.312 Resistance Level

The USD index which computes the greenback against the six major currencies was lower for the third trading session in a row. During the Asian session, the USD/JPY pair reached lower levels with increasing selling bias, particularly on the USD index. Last day’s worst performing Yen benefitted under the USD plunge. The yen went up by 0.2 percent reaching 111.45 per dollar today breaking the resistance level of 111.312

Masafumi Yamamoto, Chief Currency Strategist at Mizuho Securities, said that “If the Fed shows a gloomy outlook for growth and rates, then it’s also a negative for U.S. equities. Then that will be negative for the dollar. There is a high risk that whichever the outcome is, it will push down dollar/yen.”

AUD/USD Slips Slightly Albeit Remains Optimistic

AUD/USD pair was down falling from a two-week high level, during the day. The plunge worsened after the release of a poor Aussie House price index. The index reported a 2.4 percent drop QoQ which was below the market expectation of 2.0 percent. Reserve Bank of Australia (RBA) earlier the day discussed certain monetary minutes stating that there is an uncertain stand on the country’s economic outlook. RBA added that there remain lesser chances of a change in the interest rates in the nearby days.     

The pair touched the day’s low of 0.7089. As per the market expectation, if the latest Federal Open Market Committee (FOMC) monetary policy which is to be conducted on Wednesday announces a rate cut down, then that should have a significant impact on the next move for AUD/USD pair.

GBP/USD Ticks Up

Pound opened mixed on Tuesday morning amidst the hangover of last day’s loses against counterpart currencies viz dollar and euro. The GBP/USD pair had touched the peak of 1.3290 in the morning session. The rally started fading after the release of the mixed UK labor market report. The Unemployment rate was recorded 3.9% down in January. Average Earnings for the same period came out to be 3.4% higher MoM. Claimant Count Change which measures the change in the number of unemployed people in the UK  reported as 27.0K for February. This change was higher than the consensus estimate of 13.1K.

The pair at the time of writing this article had been drifting around 1.3275 levels. GBP now looks forward to the signs of progress happening in the Brexit front. The appeal for a Third Meaningful Vote was rejected by the Speaker of the House John Bercow. The Bank of England is expected to sustain the interest rates in the policy meeting scheduled on Thursday, as they are pretty unsure regarding the decision of Britain leaving the EU.

Euro Rebounds

The German ZEW economic sentiment index was above the market expectation. The Index was reported to decline reaching -3.6 in comparison to the consensus estimate of a fall to -11.1. Along with the ZEW index, Brexit chaos triggered Euro to touch new support lines during the day. EUR/USD traded at a two-week high level of 1.1360.   

Oil Price Rise Driven CAD

Crude prices went up after OPEC broadcasted that the Organization has canceled the next meet which was scheduled in April. The Commodity-linked CAD soared following the news. WTI was priced at $59.55 US/barrel which is the highest price level since November 2018. USD/CAD slumped to 1.3206 level.   

USD/CHF Tumbled Down Reaching Two-Week Low

The USD/CHF pair touched its two weeks low level of 0.9994 in today’s trading session. The increasing selling pressure surrounding the USD index was claimed to be the most significant rationale behind the pair drop.