Earlier today, the U.S. Dollar Index extended losses against the basket of the major currencies as yesterday’s Fed statement didn’t give clear signal on the timing of its next rate hike. How did this drop affect the technical picture of euro/U.S. dollar (EUR/USD) currency pair, USD/CAD and AUD/USD?
A month ago, the dollar and stock markets were riding high as investors bet that the Trump administration, together with the Republican-controlled Congress, would usher in an era of lower taxes, more government spending and looser regulations.
The Sterling/Dollar exploded into extreme gains on Tuesday with prices clipping above 1.2400 after Prime Minister Theresa May’s optimistic Brexit speech signalled that the United Kingdom was seeking a deal which would satisfy both parties.
The dollar rebounded on Wednesday after falling for five days in a row against its currency basket, as investors awaited a speech by the head of the Federal Reserve later in the day and looked to U.S. inflation data for clues on the path of interest rates.