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The dollar edged higher Tuesday, rebounding from a one-month low although gains are small ahead of the release of key economic data and next week’s Federal Reserve meeting. The dollar was hit late last week following comments by Federal Reserve Chair Jerome Powell stating that it’s not yet time to begin raising U.S. interest rates. The Fed has now gone into a blackout period ahead of next week’s policy-setting meeting, an eagerly-anticipated gathering where the central bank is expected to confirm the start of the withdrawal of its bond-buying stimulus.
It’s a particularly quiet day ahead on the economic calendar. U.S consumer confidence figures will draw plenty of interest later in the day, however.
The Australian dollar has initially tried to rally during the trading session on Monday but continue to see problems and the 0.75 handle.
The dollar edged lower Monday, trading near one-month lows as investors continue to assess the likelihood of U.S. rate hikes in the near term, while the Turkish lira slumped following a surprise rate cut and heightened political tension. Weighing on the dollar were comments from Federal Reserve Chair Jerome Powell on Friday indicating that it’s not yet time to begin raising interest rates. The central bank is widely expected to begin reining in its bond-buying program next month, but investors have also priced in Fed rate hikes starting in the second half of next year.
The direction of the AUD/USD early Monday is likely to be determined by trader reaction to the pivot at .7463.
German business sentiment figures put the EUR in focus, with BoE member chatter leaving the Pound in the hands of any forward guidance.
New Zealand Dollar traders are betting on more monetary policy tightening by the RBNZ in response to higher than expected inflation.
It’s another busy week ahead on the economic calendar. While the stats will provide plenty of direction, the BoC and the ECB will be delivering policy decisions in the week. Transitory or alarming?
The Australian dollar has rallied a bit during the course of the week to break above the 0.75 handle, but it is obvious that we are facing a little bit of noise here.
The Australian dollar has gone back and forth over the last couple of days, only to show signs of hesitation at the 0.75 level. This makes a certain amount of sense, due to the fact that it is a large, round, psychologically significant figure.