The dollar fell to a new low in the first session of trading on Tuesday, as traders await the Reserve Bank of Australia’s policy decision. Meetings of central banks in Europe, Canada, and Australia this week will focus on making headway toward policy normalization.
Following the announcement of job data on Friday, policymakers increased their pressure on the dollar. The data suggests that the consequences are far worse than projected, and the tapering of stimulus in the United States may now be delayed. The Reserve Bank of Australia (RBA) is expected to make a decision later today.
Traders are likely to push the Australian Dollar to $0.74 if the RBA puts a stop to asset-cutting plans. This figure represents the Australian Dollar’s current support level. However, speculations imply that the Hawkish Central Bank may consider boosting the currency’s value.
On Thursday, the European Central Bank is anticipated to make its most important policy decision.
Non-farm payrolls were substantially lower than predicted, according to the US data, and were not dependent on the Fed’s announcement to begin asset cutting this month.
The forex markets are looking to see if the lockdowns in Australia’s capital and Melbourne have put the country’s bond buy tapering plans on hold. This is why Australia is deferring its decision for the time being.
On Wednesday, the Bank of Canada said that rates will remain unchanged. However, the increase is likely to occur before the end of the year. Traders are watching Chinese trade data to see if the Covid-related port restrictions have slowed growth.
Inflation rose to a ten-year high last week, according to figures. As a result, there’s a chance that ECB purchases will slow down. The Canadian dollar has reached an all-time high of C$1.2525 per dollar in just three weeks. It’s even trading higher than its 200-day moving average.
After Friday’s payroll statistics, there are very few prospects of a tapering announcement this month, and the next month is similarly uncertain.
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