The U.S. dollar (USD) lost some ground against most currencies on Monday after Chinese policymakers said they would “definitely” raise consumption, notes Chris Turner, a currency analyst at ING.
DXY will face support at 105.40/60
“The U.S. dollar was slightly weaker against most currencies on Monday after Chinese policymakers said they would “definitely” boost consumption. This will be music to the ears of President-elect Donald Trump as he seeks to reverse China’s $300 billion trade surplus with the US.”
“This news particularly helped China-focused currency pairs such as the Australian dollar and South African rand. “Expectations for more specific Chinese policy measures on Wednesday and Thursday this week are likely to prove somewhat supportive for rest of the world currencies.”
“As of today, the US data calendar is light and the focus should be on the slightly better optimism of small enterprises included in the NFIB index. We doubt investors will want to chase DXY too low ahead of tomorrow’s US CPI release and would expect support at 105.40/60 to hold at the end.”
