Tue, May 18, 2021 @ 10:30 GMT
Home Contributors Fundamental Analysis Pro-Cyclical Currencies Rise In Asia

Pro-Cyclical Currencies Rise In Asia

Pro-cyclical currencies, Asian currencies climb

Rebounding commodity prices and vaccine optimism have lifted pro-cyclical and Asian currencies this morning. The dollar index rose 0.83% to 90.83 on Friday, but a quiet day on the majors has seen it edge lower to 90.80 in Asia.

Far more activity is being seen on the Australian and New Zealand dollars today, which endured a torrid session on Friday and registered sharp losses. The Australian dollar has risen 0.60% to 0.7750, and the New Zealand dollar is ignoring the Auckland lockdown, increasing 0.58% to 0.7274 this morning. Both have fallen over 3.0% in the previous sessions, so it would be far too soon to say their downward corrections are over in a week packed with event risk. Key support for AUD/USD is 0.7700, and for NZD/USD, it is 0.7200. Failure signals more losses ahead.

The Canadian dollar remains in trouble as well, with USD/CAD at 1.2705 this morning, a stone’s throw away from its resistance line at 1.2725, which extends back to its March 2020 highs. A rise through 1.2725 targets more USD/CAD gains to its 100-day moving average (DMA) at 1.2885 initially.

USD/JPY’s choppy one-month rally is back on track today, with the pair rising 0.35% to 106.55 on Friday. Although unchanged today, USD/JPY should now target 108.00 in the coming days. GBP/USD has fallen back into its multi-month channel and could retreat as far as 1.3750 this week ahead of the UK budget. EUR/USD fell to 1.2075 on Friday, and its critical pivot-point remains 1.2000, with a failure opening more profound losses.

In Asia, the PBOC set the USD/CNY fix slightly higher at 6.4754, but Asian currencies have rallied across the board on vaccine recovery hopes. The yuan, baht, Singapore dollar and Philippines peso are all around 0.20% higher today, ignoring weaker PMI data released earlier. As long as USD/CNY remains confined in a 6.4000/6.5000 range, regional Asian currencies are likely to continue weathering the storms seen elsewhere.

MarketPulsehttps://www.marketpulse.com/
MarketPulse is a forex, commodities, and global indices research, analysis, and news site providing timely and accurate information on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Featured Analysis

Learn Forex Trading