New Zealand dollar sinks as the US dollar, Treasury bond yields, rises. ASX 200 Eye RBA

New Zealand Dollar, ASX 200, RBA, US Dollar, Treasury Yields, Aluminum – Asia Pacific Open Market

Monday recap: US dollar loses as New Zealand dollar sinks

Despite a fairly bullish Monday for market sentiment, the risk-sensitive New Zealand dollar and the Australian dollar were some of the worst performing G10 currencies. In Asia, the Nikkei 225 and the Hang Seng closed up 1.83% and 1.01%, respectively. Meanwhile, in Europe, the DAX 30 and the FTSE 100 were up 0.96% and 0.68% respectively. American stock exchanges were offline for the Labor Day holiday.

Excluding the Norwegian krone, the US dollar outperformed its G10 counterparts. This could be due to rising long-term Treasury yields. 10-year rate rose, extending its increase since last week’s non-farm wages report. This could be due to the prospect that the Fed could raise rates later than expected, which means that the growth support policy is here to stay for long-term benefit.

Another factor that boosted the US dollar may have been profit taking, especially for pairs like AUD / USD and NZD / USD. se have seen strong gains since mid-August. Meanwhile, aluminum futures have hit the hardest in more than a decade. A military coup seized power in Guinea, threatening local bauxite production. latter is a key component for aluminum production and the nation is one of the largest exporters of bauxite.

NZD / USD technical analysis

NZD / USD pair appears to be struggling to break above the top of a bullish descending wedge chart pattern. uptrend stopped at the downtrend resistance and then a bearish candle followed. However, a break is possible. key resistance appears to be at 0.7170. Eliminating the latter could open the door to the reversal of the dominant downtrend since February. This also followed a bullish gold cross between 20 and 50 days. Simple moving averages. In the event of a downward turn, the latter could come into play as fundamental footholds.

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Read also dollar is vulnerable to the slowdown in US GDP.

Chart created in TradingView

Tuesday Asia Pacific Trading Session: RBA, AUD / USD, ASX 200 Rate Decision

Asia-Pacific markets may still be vulnerable to below-normal liquidity conditions. re are a couple of key economic events to watch out for. first is the rate decision of the Reserve Bank of Australia. A Bloomberg survey found that 10 out of 16 economists predict the central bank will delay a planned downsizing plan earlier this year due to lockdowns that threaten local economic growth.

While the central bank had previously signaled that it will continue to review its plan for the bond purchase program, Gov. Philip Lowe said the delay may not help the economy as much as the government is capable of. As such, a stiff surprise that the central bank sticks to its original phase-down schedule could lead to volatility in the Aussie and ASX 200.

Today, at an unspecified time, China will release the August trade balance report. Lockdowns in the world’s second-largest economy have fueled concerns about slowing growth. This could be reflected in weaker trading activity, which could be a bad omen for sentiment-sensitive Australians and Kiwis, especially once the RBA is to the rear.

ASX 200 technical analysis

ASX 200 futures have been mostly in a state of consolidation since mid-August. index appears to be trading within the bounds of a bearish ascending wedge chart pattern. A lower breakout can open the door to lower spin material. So keep an eye out for key support. This appears to be the 38.2% Fibonacci extension at 7432, highlighted in red on the chart below.

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Read also Natural gas closed the week at two and a half year highs. Why could the best come?

Chart created in TradingView

– Written by Daniel Dubrovsky, Strategist for DailyFX.com

To contact Daniel, use the comment section below or @ddubrovskyFX at

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