China’s officials recommended the government to halt purchases of US Treasury bonds. In response to the news, US dollar index fell against most currencies in the North American trade.
The index stumbled below 92.00 amid investors’ worries. Interestingly, no official announcement from China’s government followed the news. So experts consider this information to be a pure verbal intervention. Meanwhile, the US dollar index has trimmed some losses, trading at about 92.50.
Nevertheless, Asian traders still opt to sell the US dollar. The dollar/yen pair is trading next to 111.80. The Japanese yen found support from the Bank of Japan’s decision to reduce the amount of its purchases of Japanese government bonds. The decision signals the intention to scale back the monetary stimulus program from this year.
Today, the Australian dollar revealed interesting market news. Following the news from China, the aussie bounced against the US dollar. The AUD/USD pair is still trading higher around 0.7870.
Another reason behind the buying sentiment on the Australian dollar is a report on retail sales. Australia’s retail sales climbed 1.2% in November, beating expectations. The fresh reading is much stronger than a 0.5% increase in the previous month. Experts say that such upbeat data is driven by Black Friday and the launch of iPhone X that boosted consumer activity.
Analysts assume the US dollar index could rebound today in case a CPI report from the US comes out better than expected. Besides, traders will resume interest in the carry-trade issue and speculate about the Fed’s agenda for lifting interest rates.
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Rumors setting tone on Forex (11.01.2018)