China Stirs the USD to Strengthen Before the FOMC

thecekodok

Positive sentiment continued on European session markets, seeing risk-sensitive currencies the Aussie and New Zealand dollars remain trading higher.


Earlier in the Asian session, the Communist Party's top decision-making body (Politburo) announced it would increase policy stimulus to support China's economic recovery.


In addition, Chinese state-owned banks are also selling US dollars and buying yuan to curb the weakness of their currency.


This caused the yuan to strengthen and the stock market to be positive, thus also supporting the Aussie and New Zealand dollars to strengthen.


Aussie dollar investors are now awaiting the publication of Australian inflation data for the second quarter in the Asian session tomorrow (Wednesday) which could determine the direction of the currency's next move.


The strengthening of the yuan slightly slowed the trade of the currency king US dollar to strengthen ahead of the FOMC policy meeting.



It showed on mixed greenback trading, with the dollar index continuing to hover around the same price at 101.30.


Focusing on investors at the New York session was the release of US consumer confidence data for July.


The euro extended weakness in the European session, still weighed down by dismal manufacturing and services PMI data and a lower-than-expected German Ifo business climate index report.


The pound currency has changed slightly with the price still hovering around the same zone compared to the greenback dollar.


In addition, the yen also exhibited a flat movement, where prices remained trading weaker against the US dollar.


The Canadian dollar strengthened in line with other commodity currencies the Aussie and New Zealand dollars which rose, plus support from stronger crude oil trading.

Tags