Dollar recovers from early losses as risk stumbles a little
The greenback firms across the board as the risk mood turns around
- PBOC reportedly to pause easing as the economy recovers, wary of over-stimulus
- China confirms to close its Houston consulate on US demand, warns of retaliation
One can point to the two key headlines above for the turnaround in the market mood, with risk hitting a bit of a stumbling block to start European trading after a modest start.
AUD/USD hit a high of 0.7168 earlier before stumbling to a low of 0.7112 as the dollar firmed following the headlines above. The US-China story is bearing more weight, but this could also be suggestive that the market isn’t too confident about the risk rally overnight.
European equities are now in the red, with the DAX seen lower by 0.6% on the day.
Elsewhere, EUR/USD has also fallen back to 1.1510 levels while GBP/USD is taking a decent knock under its 200-day moving average to 1.2660-70 levels:
Apart from cable, most dollar pairs are seeing a milder correction with EUR/USD still holding above 1.1500 and that is a key level to watch for buyers in general.
In the commodities space, we are also seeing a bit of a pullback in silver gains as spot price falls back to $21.77 after a surge higher to $22.83 earlier in the day.
Source: Technical analysis