Sydney, Aus. – The new head of the European Central Bank, Christine Lagarde, is about to give her first official speech during their upcoming session on foreign exchange this Monday as the Euro was sighted to a major chart resistance to the U.S. dollar.
The week started with the Euro well supported as it hit a firm $1.1170 this week while it attains to reach its peak last October which was at $1.11179. Given the average of $1.1195 in a span of 200 days, euro is looking good on investors’ eyes at the very least.
As for Lagarde’s upcoming speech as the new president of the ECB, many of the markets are in the assumption that she will simply retain with the easy policy script of Mario Draghi, who was her predecessor. Aside from Lagarde, there are also at least seven Fed speakers that are expected to speak this week.
The investors are hoping that the United States will choose not to impose tariffs on auto imports. This is so they will have kept it near its highest level in weeks. Luckily for them, during an interview with U.S. Commerce Secretary Wilbur Ross, he stated that Washington will no longer need to impose tariffs on imported vehicles. This decision was led to what has been a good conversation with the automakers in Japan, Korea and the European Union.
The South African Rand was one of the few movers during the recent survey, although investors were relieved as they feared that ratings outlook was cut to junk, but rather only downgraded for the country’s debt. The sharp losses of the rand last week was recouped a little when it was quoted up to 1% at 14.8650 per dollar.
The Chinese Yuan also rose to a 12-week high of 7.0225 against the offshore market greenback. In line with this, there has also been an improvement in the risk sentiment of the investors.
After last month’s rally from $1.2200, Sterling has made itself remain well-bid at $1.2932. According to the investors, now that there is an election campaign, there was less risk of a hard Brexit.
There have also been reports that even the U.S. dollar itself is currently under pressure after the Federal Reserve cut rates, and even leaving that door open for such actions in the near future.
According to an analyst at ACLS Global, there is a trend of global policy rates once again converging at the bottom which could mean less volatility among currencies while there is shrinking in the interest rate differentials.