10.01.2019: No one wants to venture, buying USDX
The minutes of the latest ECB policy meeting did not influence a strategy on the euro/dollar pair. The most popular currency pair is still trading higher.
The ECB policymakers still voice concern about the eurozone’s economy amid various headwinds such as uncertainty around Brexit, the unsettled trade conflict between the US and China, and a threat of a slowdown in the global economic growth. So, the regulator is unlikely to tighten monetary policy in the short term. The minutes read that the eurozone’s economy benefits from low interest rates.
Nevertheless, investors were ready for such decisions. Thus, the euro/dollar pair remained trading flat. The pair closed the European trade at near 1.1520.
The US dollar index tried to regain losses in the early North American trade and rebounded to 95.3. However, the greenback’s growth is capped by the minutes of the December policy meeting of the Federal Reserve.
Market participants neglected data on the US labor market. The number of initial jobless claims declined on the first week of the year. So, last week the indicator rose by 216,000, down from the expected increase of 225,000.
Nevertheless, the US dollar carried on with a decline against its rival currencies. The Canadian dollar is still gaining ground amid the broad-based weakness of the US dollar. The USD/CAD pair settled down at 1.3250. Canada released better-than-expected economic data. The number of building permits climbed by 2.6% in November after a contraction in October. Economists had projected another drop.
Experts say that traders were hesitating to open long bets on the US dollar, anticipating a speech by Fed’s leader Jerome Powell. It was the only chance for traders to revise trading preferences on Thursday. Most experts share the viewpoint that the Federal Reserve decided to pause the cycle of rate hikes indefinitely. This cautious approach puts pressure on the greenback.
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