U.S. Dollar Appreciates As Geopolitical Worries Fade
January 07 2020 - 3:03AM
RTTF2
The U.S. dollar strengthened against its major counterparts in
the European session on Tuesday, as investor sentiment lifted up on
optimism over the U.S.-China trade deal and easing tensions in the
Middle East.
Geopolitical tensions reduced amid lack of fresh developments in
the conflict between the U.S. and Iran.
Investors also shifted their focus to the monthly U.S. jobs
report due on Friday, which could offer some clues on the world's
largest economy and the Federal Reserve's monetary policy path into
2020.
On the trade front, it is expected that the Chinese trade
delegation will sign the first phase of its trade deal with the
U.S. in Washington on Jan. 15.
Investors became optimistic about global economic outlook after
surveys of service sectors out overnight showed an improvement in
the United States, U.K. and EU.
Investors await reports on the U.S. trade deficit, service
sector activity and factory orders due in the American session.
The currency has been trading in a positive note in the previous
session.
The greenback climbed to a session's high of 0.9717 against the
franc, from a low of 0.9676 seen at 5:00 pm ET. The greenback may
locate resistance around the 0.99 level.
Having dropped to a 5-day low of 1.3212 against the pound at
3:30 am ET, the greenback reversed direction, trading as high as
1.3123. The greenback is poised to challenge resistance around the
1.30 level.
The greenback appreciated to 1.1165 against the euro from
Monday's closing value of 1.1197. If the greenback rallies further,
1.10 is likely seen as its next resistance level.
Survey data from IHS Markit showed that Germany's construction
sector expanded at the fastest pace in nine months in December.
The construction Purchasing Managers' Index rose to 53.8 in
December from 52.5 in November. This was the highest score since
March.
Extending early gains, the greenback spiked up to near a 3-week
high of 0.6870 against the aussie and near a 2-week high of 0.6640
against the kiwi, off its early lows of 0.6942 and 0.6679,
respectively. The greenback is seen finding resistance around 0.67
against the aussie and 0.65 against the kiwi.
Reversing from a 1-week low of 1.2957 seen at 3:45 am ET, the
greenback rose to 1.2987 against the loonie. The next possible
resistance for the greenback is seen around the 1.33 level.
The greenback recovered to 108.50 against the yen, from a low of
108.26 hit at 2:30 am ET. Further rally may see the greenback
facing resistance around the 111.00 level.
Looking ahead, U.S. and Canadian trade data for November, ISM
services PMI for December, factory orders for November and Canada
Ivey PMI for December will be featured in the New York session.
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