The US dollar is king once again, raging across the board, with even the safe haven yen suffering losses.
It seems like easier monetary policy (the latest from China) is now triggering a negative atmosphere: the situation is worse than it had been seen earlier and instead of riding on cheap central bank money, markets are now worried. Here are updates on 6 currency pairs:
- EUR/USD is extending its big falls from yesterday, which were of course a result of Draghi’s 5 blows to the euro. It broke below uptrend support and several support lines to reach 1.1033. The round level of 1.10 is ahead, with more support at 1.0950 and 1.0810.
- GBP/USD is holding quite well, extending the range to the downside at 1.5380. Immediate support awaits at 1.5365. So far, it remains in a more limited range. The BOE is expected to raise rates after the Fed.
- USD/JPY: This is the most surprising move of all – a rise to 120.85, still below the high of 121.20 seen last month. If the world is gloomy, the yen usually benefits. However, there is a chance that the Bank of Japan will follow suit and ease on October 30th. So far it seemed unlikely, but expectations change all the time.
- USD/CAD: An eventful week is generally negative for the Canadian dollar. The glut in oil, lower forecasts and now also a small miss on inflation all weigh on the Canadian dollar.
- AUD/USD: The Aussie initially received a boost from the rate cut in China, until the interpretation changed and the pair is sliding to 0.7248. Support awaits at 0.72. Resistance is at 0.7280.
- NZD/USD: The kiwi was hit by falling milk prices earlier in the week but enjoyed the Draghi show. It is now on the back foot at 0.6780.
More: Draghi opens the door to 1.05 – Goldman
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