The US dollar took a nosedive yesterday in response to yesterday’s report on jobless claims. Its index seems to close on Friday lower for the second week in a row. On early Friday, the index was trading in a narrow corridor between 103.2 and 103.4.

The US dollar weakened to a two-week low against a basket of six major currencies in parallel to yields of US Treasuries. Yields of both 2- and 10-year Treasuries went down. Nevertheless, the greenback gained momentum and rebounded to 103.4.

Apparently, the bullish momentum occurred amid weekly profit-taking on stock markets and a decline in the global risk-on mood. So, the US dollar is expected to enter a consolidation stage which could last until the release of the US inflation data.

In case the instrument maintains bullish momentum next week, it could face resistance at 104.6, the level printed on May 31. On the contrary, if selling pressure on the greenback escalates, its index could break 103.2, a one-month low recorded on June 8, and test support at 102.9.

Market revised its sentiment on the Japanese yen overnight. Having reached a one-week low at 138.7, traders rushed to sell the yen. As a result, the dollar/yen pair jumped to 139.6. The bulls are pushing the instrument up following the intraday corridor between 138.7 and 139.6.

All in all, the overall market sentiment depends on the rhetoric of the US and Japan’s central banks. Obviously, the Japanese yen is giving in to the greenback. The Bank of Japan maintains all settings of its ultra-loose monetary policy. This message was sent once today again by the Governor.

Speaking for the parliament, Kazuo Ueda said that the Bank of Japan intends to pursue its ultra-accommodative monetary policy to ensure steady inflation at 2%. Japan’s regulator is due to announce its decision on interest rates in a week, on June 16.

This will happen after the policy meeting of the US Federal Reserve and could determine a further trajectory for the dollar/yen pair. For a while, the US dollar’s growth is subdued by the prospect of a dovish pause in the Fed’s monetary policy. In turn, the yen could regain some losses as a safe-haven asset on the back of a threat of a global downturn.

Economic conditions in China cause an alarm in the Asia-Pacific region. In the recent reports, China’s trade balance surplus fell to the lowest level in the three months. Besides, the annual rate of consumer inflation edged up to 0.2%, thus indicating weakness in the second-largest global economy.

Amid the dismal statistics, market participants are speculating that the People’s Bank of China might decrease interest rates again. The offshore yuan weakened against the US dollar to the lowest levels in six months. Indeed, the greenback benefits from economic troubles in China as a safe-haven asset.

A decline in the yuan affected the forex rate of the Australian dollar which is frequently used as its liquid replacement. Economic uncertainty in China, the top global crude exporter, is also a headwind for oil prices.

WTI crude futures are trading lower today, thus putting pressure on the Australian dollar as a commodity currency. Today a bust of the risk sentiment on stock markets is dampened by the US dollar’s advance. No wonder, the aussie is trading with high volatility.

The AUD/USD pair broke the resistance at the psychological level of 0.6700 and approached 0.6715. The Australian dollar is withstanding selling pressure, trading inside the corridor between 0.6693 and 0.6725.

The cautious sentiment in stock markets discouraged the risk-sensitive New Zealand dollar. Amid the moderate growth in US Treasury yields and the greenback’s advance, the kiwi changed hands between the buyers and sellers inside the corridor between 0.6084 and 0.6106.

Still, the New Zealand dollar spiked to 0.6103, the highest level in more than two weeks and dipped to 0.6095. Following a sharp plunge in late May after the Reserve Bank of New Zealand’s policy decisions, the kiwi has regained almost 1% of its losses against the US dollar.

00:00 Intro
00:30 US
01:41 USDX
03:07 USD/JPY
03:36 US and Japan’s central banks
04:43 CHINA’S CONSUMER PRICE INDEX, Y/Y
05:31 AUD/USD
06:32 NZD/USD

https://www.instaforex.com

FX Analytics - https://www.instaforex.com/forex_analytics
Forex Calendar - https://www.instaforex.com/forex_calendar
Forex TV from InstaForex - https://www.instaforex.com/instaforex_tv

Forex charts - https://www.instaforex.com/charts
Instant account opening - https://www.instaforex.com/fast_open_live_account
Forex Trading Contests - https://www.instaforex.com/forex_contests

List of official InstaForex blogs:
https://www.facebook.com/instaforex
https://www.instagram.com/instaforex/
https://twitter.com/InstaForex

#forex_news # asian_session #instaforex_tv