Forex School- The Aussie gained further in Asia on Monday as the dollar fell on a trade-weighted basis as U.S. Vice President Mike Pence was slated to head to the ceasefire line on the Korean peninsula known as the DMZ (de-miliartized zone) and China GDP for the first quarter was awaited.
AUD/USD traded at 0.7593, up 0.20% with markets in Australia shut for Easter Monday. USD/JPY changed hands at 108.34, down 0.29%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.19% to 100.30, nearing a five-month low.
Ahead, China reports first quarter GDP with a 1.6% gain seen quarter-on-quarter and a 6.8% pace seen year-on-year. As well in China, industrial production for March is seen up 6.3% year-on-year and retail sales expected to post a 9.6% increase. Later, Bank of Japan Governor Haruhiko Kuroda speaks and India reports wholesale price inflation.
Last week, most major markets were shut for Good Friday, with the the dollar up against a basket of major currencies on Thursday, mounting a recovery from its slump in the previous session, following President Trump’s comments the currency was “getting too strong” while mostly upbeat economic data lifted sentiment.
The dollar suffered its biggest one-day slump in more than three weeks on Wednesday, after President Trump told the Wall Street Journal, he thinks the currency (dollar) is “getting too strong” and favored a low interest rate environment.
But the dollar mounted a recovery on Thursday, as investors seemed to cover short positions, ahead of the Good Friday holiday in the U.S. and Europe this week.
Trump’s comments modestly dampened expectations of a June rate hike, according to investing.com’s fed rate monitor tool, the probability of a June rate hike eased to 49.5% from 52.8%, a day earlier.
Meanwhile, slower than expected growth in initial jobless claims and bullish consumer sentiment lifted sentiment while US producer prices dropped for the first time in seven months.
The Labor Department said on Thursday, initial jobless claims fell by 1,000 to a 234,000 for the week ended April 8 while the producer price index for final demand slipped 0.1% last month. The University of Michigan said its consumer sentiment index climbed to 98.0 in April, well above expectations of a fall to 96.5.
