The slump rally that had begun on June 9 got slightly diverted in today’s trading session. The pivotal point for the reversal was 0.6835 levels. The pair had started the day near 0.6855 levels and continued the downtrend. The early slip in the AUD/USD pair came in after the critical release of RBA meeting minutes.
The policymakers mentioned that the Bank would opt for reducing the interest rates again. Following such a dovish stance, the AUD/USD pair dropped nearly to the five-month bottom. China and Australia are good trading partners. Meantime, Trump tweeted that “Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting.” Hence, positive news on the US-China trade dispute front allowed the pair to recover the early morning losses. The Aussie pair soared 0.72% reaching day’s high near 0.6882 levels.
The Euro pair kept the uptrend intact until President Draghi’s dovish stance over the economic growth. Mario mentioned that the Bank would leave the door open for further stimulus, including rate cuts. Hints for such a rate amid lack of improvement in the Eurozone economy hammered the Fiber. The EUR/USD pair suffered a massive plunge dropping more than 0.47% following the ECB President comments. The market reaction took the pair from 1.1242 levels to 1.1189 levels.
Laterwards, the pair continued to maintain a range-bound performance sustaining between 1.1181 and 1.1211 levels. German ZEW Survey June Economic Sentiment data release shocked the market. Street analysts had expected -5.9 points this time. Anyhow, the reports came as -21.1 points. Also, the Eurozone CPI data was lower than the market expectation. The May MoM CPI data reported 0.1% lower than the consensus estimates of 0.2%. The Eurozone ZEW Survey – Economic Sentiment for June also disappointed the market participants. The Sentiment Index came in as -20.2 over -3.6 forecasts.
After a small tumble rally in the early hours, the trend in the USD Index reverted near 97.38 levels. From this pivotal reversal point, the Greenback went straight up, touching 97.76 levels. The rise in the US Dollar came in as its major rival – EUR/USD suffered a sharp pullback in the Asian session. The Euro pair had fallen over the dovish economic stance provided by the ECB President Mario Draghi. The stances included probabilities of a rate cut in the near term considering the sluggishness improvement in the Eurozone economy.
Anyhow, this has lifted the Greenback to 13 days high. In response to Draghi’s commentary, Trump tweeted “Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.” Meanwhile, on the economic docket, there was an overall mixed performance. The May MoM Building Permits data reported 2K lower than the consensus estimates of 1.296 million. Despite that, the May MoM Housing Starts published 30K higher than the market hopes of 1.239 million.
The Loonie pair had made the opening on Tuesday near 1.3409 levels and remained slightly lower initially. Canada is among the largest exporter of Crude Oil. Any fluctuations in the Crude prices have an inverse impact over the pair’s movements. The pair had reached 1.3432 levels at around 10:00 GMT marking day’s high. However, the prices soared 5.8%, reaching the $54.50 per barrel mark in the Asian session. The primary driver was the positive sentiment developed around the US-Sino trade dispute after Trump’s tweets. The US President mentioned about productive talks to happen in the G20 meet, next week.
This article was originally posted on FX Empire
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