Free Trial

USD Extending Higher Approaching APAC Crossover

  • Fed rate-hike concerns pushed US yields on Monday, filtering through to renewed optimism for the greenback, with the USD index registering a 0.75% advance as equity indices also sunk below post NFP lows.
  • The greenback spent European hours trading in mixed fashion across G10 as a strong rally in USDJPY was largely offset by a surging Chinese Yuan on renewed optimism surrounding a potential loosening of Covid restrictions.
  • However, a firm US ISM Services figure prompted a strong USD response which slowly gathered momentum throughout US trade. With poorer sentiment across bond/equity markets, the likes of JPY, AUD and NZD are the day’s weakest performers all falling around 1.5% against the greenback.
  • Despite the strong selloff for the Japanese Yen, moving average studies for USDJPY remain in a bear mode position and this highlights current sentiment. Key short-term resistance to watch does not come in until 139.89, the Nov 30 high.
  • The single currency has held up better, with risk off dynamics underpinning Euro crosses and EURUSD slowly edging back below the 1.05 handle after printing fresh five-month highs earlier in the session at 1.0595.
  • The dip in sentiment has also filtered through to emerging market, with the Mexican peso particularly feeling the pinch. USDMXN is displaying some significant reversal patterns amid the near 2% rally on Monday and a sustained break of 19.8102, 50.0% of the Sep 28 - Nov 29 bear leg, should provide an additional bullish impulse.
  • RBA decision/statement overnight is the highlight on Tuesday. German factory orders and US and Canadian trade balance data is also on the docket.

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.