US dollar regains poise after Powell’s blow, Bitcoin rebounds, PMIs in focus

The market mood remains somewhat buoyed, courtesy of the reassurance from Fed Chair Jerome Powell on inflation and monetary policy, which eased the rising fears over a sooner-than-expected rate lift-off. Most Asian stocks follow Wall Street higher, although the gains appear limited by rising coronavirus cases in Australia, New Zealand and Taiwan.

Additionally, uncertainty over the US infrastructure stimulus deal and resurfacing Sino-American tensions over the Taiwan strait keep investors slightly on the edge. The futures tied to the S&P 500 index rises towards 4,250 while the US Treasury yields remain subdued amid Powell’s dovish comments.

The American dollar attempts a rebound after the Powell-led decline, weighing on most majors. AUD//USD remains depressed below 0.7550 amid US-China tensions and dovish comments from RBA’s Deputy Governor Luci Ellis. Ellis noted that the board remains committed to “maintaining highly supporting monetary conditions.” Meanwhile, USD/JPY flirts with two-month tops of 110.86.

EUR/USD is on the backfoot below 1.1950 ahead of the Eurozone and German Preliminary Manufacturing and Services PMIs. GBP/USD is consolidating below multi-month highs on the 1.3900 level amid renewed Brexit optimism, as the UK and EU officials sound positive about resolving the Northern Ireland (NI) protocol issue.

Gold price is finding its feet after Tuesday’s drop, although $1790 remains a tough nut to crack for the bulls. US Markit PMIs awaited for fresh cues.

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