Market sentiment improves on early Tuesday as softer US data joins positive remarks from the officials about Sino-American talks. Adding strength to the cautious optimism could be the softer US data. However, the Reserve Bank of Australia (RBA) surprised traders with another hawkish move and propels AUDUSD towards making it the biggest gainer among the G10 currency pairs.
Apart from the US-China headlines and RBA’s 0.25% rate hike, upbeat Aussie data and softer US PMIs were additional reasons that fuel the AUDUSD price on Tuesday.
Elsewhere, receding hawkish Fed bets weigh on US Dollar and the US Treasury bond yields but the Asia-Pacific equities remain pressured.
On a different page, downbeat German Factory Orders jostle with hawkish ECB speak to make EURUSD sidelined.
It should be noted that the US Dollar's weakness and cautious optimism failed to impress cryptocurrencies as they lick the US SEC-induced wounds.
Following are the latest moves of the key assets:
A slew of softer US data keeps the US Dollar bears hopeful, amid hopes of the Fed’s policy pivot, as Federal Reserve (Fed) officials are off the speakers due to the pre-FOMC blackout. Also weighing on the greenback could be the mildly positive risk appetite as US-China policymakers cite positive talks. Furthermore, downbeat yields amid receding recession woes also allow the USD to stay weak.
While the US Dollar weakness allowed the majors to extend the previous week’s corrective moves, RBA’s hawkish action bolsters the AUDUSD but softer German data probe EURUSD traders. That said, GBPUSD also fails to cheer on USD weakness amid economic fears surrounding the British economy, mainly due to the higher inflation.
That said, cryptocurrencies struggle to recover after posting the biggest daily loss in over a month, backed by the US SEC’s filing against Coinbase and its boss. The reason could also be linked to the crypto industry leaders’ sympathy for the leader Coinbase and the softer USD.
Apart from the second-tier EU data, the economic calendar appears mostly empty for Tuesday, which in turn will offer a lackluster session ahead. However, mixed mood and easing hopes of the Fed’s rate hike can keep weighing on the US Dollar unless the recently downbeat headlines from the banking sector gain momentum.
May the trading luck be with you!