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The euro skidded above a 16-month trough at $1.1224 to $1.1243, supported by stronger-than-expected European business surveys. Fresh clues will be hinted at tonight's FOMC minutes.
Sterling held above an 11-month low of $1.3344 on Tuesday after BoE’s Haskel and Bailey reiterated possible rate hikes and not a hard form of forward guidance, respectively.
The Japanese yen tumbled to a four-and-a-half-year low of 115.23 per dollar as the risk sentiment remained sour amid increased anxiety over the Fed’s rate hike outlook.
The Canadian dollar mounted to 1.2690 against the dollar, as crude and Brent oil prices gained after President Joe Biden announced his administration’s plans to tap into the Strategic Petroleum Reserve.
The risk-sensitive Australian dollar crashed to a seven-week low of $0.7205 after the Reserve Bank of Australia announced that interest rates on this side of the ditch will not likely rise until 2024.
The South African rand hovered near 15.85 per dollar, shrugging off the leading South African business cycle indicator dipped in September, mainly due to a drop in prices of export commodities and fewer residential building plans were approved.
The dollar-rupee inched up by 5 cents this morning to 43.50(selling) on the domestic market.
13:00 - EUR - German Ifo Business Climate Index (Nov)
17:30 - USD - Core Durable Goods Order (MoM)(Oct)
17:30 - USD - GBP (QoQ)(Q3)
17:30 - USD - Initial Jobless Claims
19:30 - USD - New Home Sales
19:30 - USD - Crude Oil Inventories
23:00 - USD - FOMC Meeting Minutes
The dollar Index extends its intense rebound near the 94.00 threshold, clinching a new high for this year 2021 amid an earlier rate hike expectation and announcement of a nearing tapering asset purchase which clearly impacted the yield curves.
A tightening of monetary policy by the European Central Bank remains far in the future but ECB remains vigilant on its inflation figures yet to be released this Friday. This could give additional upward momentum on the USD in the near term and exerts additional selling pressure on the euro and the pound.
On the technical side, after a breach and close above the 100% retracement A-B-C (93.72 level) ,the greenback could easily approach the 113% level at 94.38 followed by 127% level – 94.98 level in the near term. Resistance at 96.47 (161.8%) remains key level to watch
1.3750 marked the completion of ‘wave e’ of the triangular retracement (wave B) of corrective move A-B-C for GBPUSD and abruptly, we saw fresh sellers entering the market below the 1.3600 levels yesterday.
As per Elliott wave principle, GBPUSD is battling around 1.3515 levels and higher inflation, Brexit and Petroleum concerns could exert further pressure on the pound towards 1.32 levels towards completion of wave C.
A breach and close above 1.3750 nullify this downward pattern.