10.09.2019: USD loosens its grip (USD, JPY, AUD)


The US dollar was losing steam in the Asia-Pacific trade amid waning tensions in the trade conflict between the US and China. Traders cheered a report on China’s consumer inflation. Consumer prices climbed at a steady pace of 2.8% in August on a yearly basis. Analysts had forecast the inflation rate to ease to 2.6%. Nevertheless, investors are still cautiously optimistic because China’s factory inflation has been extending weakness that spoils the positive effect of the upbeat CPI. Indeed, falling producer prices signal a further slowdown in consumer inflation and GDP rates. The PPI showed the worst year-on-year reading in the recent three years. Nevertheless, it surpassed the consensus. Meanwhile, traders are in the wait-and-see mood amid such mixed economic data. The US dollar index which tracks the dynamic of the greenback against a basket of six major currencies has stuck in a trading range between 98.20 and 98.40. Nevertheless, investors are poised for risky bets. Traders pin hopes that the US and China are ready to resume the trade talks. Sell-offs of safe haven assets pushed the dollar/yen pair to 107.40, the weakest level since August 2. The Australian dollar is still trading higher but halted its climb in light of the news on downbeat China’s PPI. Besides, the National Australia Bank showed that Australia’s business confidence and conditions deteriorated in August. The AUD/USD pair is consolidating at near 0.6860. The aussie could trade under pressure for the whole day, thus interrupting a five-day winning streak, the longest one since January 2018. The highlight of the week is a key policy meeting of the ECB that will unveil its policy update on Thursday. Last time, the regulator decided to put the key interest rate on hold. However, Mario Draghi dropped a hint about new measures of fiscal stimulus. Follow developments in financial markets on InstaForex TV channel! Stay tuned!

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