The increasingly unpredictable French presidential election race unnerved European financial markets on Tuesday, tipping the euro towards its biggest fall this year and driving investors away from French government bonds.
The U.S. dollar had another difficult week as it depreciated against most major pairs. Central banks remained on the sidelines as the Bank of Japan, U.S. Federal Reserve and Bank of England all left their monetary policies unchanged awaiting further data. The Reserve Bank of Australia is up next on Monday, Feb. 6 at 10:30 pm EST. It is anticipated the RBA will not make any changes on its February meeting.
The euro fell around half a percent on Monday as concerns over French politics ahead of presidential elections set for April and May drew investors' focus back to a year of political risks to Europe's established order.
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?
If visibility and predictability are two foundations upon which stable financial markets are built, comments from the White House this week on the U.S. dollar suggest investors should brace for increased foreign exchange volatility.
The U.S. dollar is weaker after the Trump administration remained more focused on anti-trade policies than the fiscal stimulus and infrastructure spending that lifted inflation expectations in the United States. The first 100 days of Trump' administration will be crucial.
Believe it or not, January is about to come to an end. Back in December, the European Cenrtal Bank extended the duration of its quantative easing stimulus package while the Fed raised interest rates. The divergence between monetary policies in the two regions thus expanded further, and calls for euro/U.S. dollar (EUR/USD) curreny pair parity increased.
After appreciating earlier this month following a period of investors unwinding on USD positions, both the British pair/U.S. dollar (GBP/USD) and the euro/U.S. dollar (EUR/USD) currency pairs have attracted sellers as the month draws to a conclusion.