Majors, Asian currencies rise against greenback
Rising U.S. stock index futures, as the market ignores a steeper U.S. yield curve for a more satisfying lower-for-longer narrative, could torpedo my U.S. dollar correction before it started. After removing modest gains overnight as long-term US interest rates rose; the US dollar is in full retreat this morning in Asia.
The dollar index has fallen 0.15% with EUR / USD, GBP / USD, AUD / USD and USD / JPY about 0.35% higher in Asian trading. Although the euro is middle class, the other protagonists are now testing monthly levels of resistance to greenback. Sterling has risen to 1.3245, just below the level of 1.3280, the gate to a further rally to 1.3500. AUD / USD at 0.7290, see further gains if 0.7300 is cleared.
AUD / JPY broke prolonged resistance at. 77.00 overnight and rose to 77.90 this morning. It has room for further gains to 80.00 initially and may telegraph more significant increases in USD / JPY in the future. The USD / JPY is extremely sensitive to the exchange rate differential, as the movement is higher in US interest rates leading the USD / JPY higher to 106.90 today. It is just below its 100-day moving average (DMA) of 107.00. It has not been above its 100-DMA since a brief rise in early June. A rise through 107.00 opens up further gains to 108.00, its 200-DMA, in the first place.
Everywhere in Asia a similar, if a more sedate pattern is followed. USD / CNY, USD / THB, USD / SGD and USD / PHP are all 0.25% lower for the session.
U.S. dollar sales appear to be more driven by the rise in U.S. stock index futures than a major epiphany of Asia. Nevertheless, if the rise in US interest rates is sniffed out as soon as it began this afternoon in New York, the big US dollar rotation could find new momentum at the end of the week and crush my view of the US dollar bullish correction below it.