The US dollar slightly rose on Tuesday, approaching its highest level in about three months, while the Australian dollar lost its strength after an earlier session increase. A series of strong US economic data and statements from Federal Reserve Chairman Jerome Powell led to the dismissal of speculations about early and sharp interest rate cuts, supporting the US currency. The dollar index, which measures the US currency against six other currencies, increased by 0.1% to 104.58, after touching 104.60 on Monday, its highest level since November 14.
The Euro decreased by 0.1% to $1.0732. German industrial orders unexpectedly jumped in December, while consumers in the Eurozone reduced their expectations for inflationover the next 12 months. The Australian dollar rose by 0.05% to $0.6492, moving away from the lowest level in two and a half months at $0.6469 touched on Monday. The New Zealand dollar also rose by 0.13% to $0.6063. Sentiments towards the Australian dollar were indirectly boosted due to the recovery in the Chinese stock market, where speculations increase about more state policy measures to stabilize it. The Australian dollar is typically strongly linked to Chinese stocks, as China is Australia’s largest trading partner. Chinese stocks recorded their largest daily gains since 2022, and the yuan rose, thanks to signals that authorities are strengthening their commitment to supporting declining markets.
The British pound recorded 1.2565 dollars in the latest transactions, up about 0.15% during the day but remained close to the lowest level in seven weeks recorded on Monday. The pound’s decline on Monday came despite some optimistic economic data, showing that the unemployment rate in the United Kingdom was likely much lower in late last year than previously thought, which could also lead to potential interest rate cuts in Britain. The Japanese yen was the strongest during the day at 148.71 against the dollar but remained not far from its lowest level in two months at 148.90. Real wages in Japan dropped for the twenty-first consecutive month, but at a slower pace, while household spending decreased for the tenth consecutive month, indicating that inflation surpassed wage recovery and continued to impact consumer spending.
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Shady Fouad is a technical analyst at LDN Company
Shady's strategic vision in the currency markets is reinforced by more than fifteen years of trading experience, which enables him to blend economic and technical analyzes with high efficiency, and find the best investment ideas for traders.
