13.12.2019: USD loses momentum (USDХ, USD/CAD)

13.12.2019: USD loses momentum (USDХ, USD/CAD)


The appetite for risk has increased on the
market. A wave of positive has hit traders by the
end of this trading week as Donald Trump and Boris Johnson downplayed the existing risks. The latest news has turned to be unfavorable
for the US dollar, so it is trading at multi-month lows. The US dollar index that measure the value
of the American currency against other majors plunged to 96.83 in late deals. On a daily basis, it lost about 0.60%. At the same time, the greenback’s opponents
are rising steadily, especially the pound sterling. It has demonstrated the best performance for
the past decades. The British pound gains ground amid the recent
developments in the UK where the political uncertainty has finally faded away. Moreover, the good news about a high possibility
of the US and China striking a deal also encouraged market participants who expected a less positive
outcome. Therefore, the rise was even faster. The Chinese yuan advanced while the Japanese
yen depreciated which coincided with the forecast of a rise above 109 in the USD/JPY pair. The outlook for the US dollar is pessimistic. The American currency can take a nosedive
as the country’s central bank is planning to inject a record sum into the financial
system. The total liquidity volume is expected to
be shy below 500 billion dollars. The USD/CAD has been trading in a bearish
trend this week. The Canadian dollar managed to reach the level
of 1.3162 amid a rise in oil prices and the weaker US dollar. Today the pair was trading flat as the recent
events had been already factored in. Today Bank of Canada Governor Steven Poloz
delivered a speech but he said nothing significant that could spark interest from investors. Overall, his comment were vague and did not
provide any specific ideas about the economic outlook. The only thing that Mr. Poloz paid attention
to was a moderate recovery of the global economy. The USD/CAD is likely to maintain the bearish
bias but it looks like it is gathering momentum for a rebound. If the pair fails to hold above 1.3150, it
will move towards 1.31. The widespread optimism regarding the fist
phase of the US-China trade deal can fade away in future. Today none of China’s state media provided
any publications on this issue. Beijing’s restrained reaction indicates uncertainty
as to whether the parties will be able to strike the deal after all.

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