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The US dollar is struggling to pull itself upward against the Hong Kong dollar in the foreign exchange scene. The pair is widely expected to drop to its lowest level in three years by the first week of February as the HKD continues to advance against the USD. There are no scheduled reports on Hong Kong’s economy due today, however, recently, it’s unemployment and CPI figures reportedly dipped. HK’s Census and Statistics Department recently showed that its annual consumer price index for December contracted from 3.0% to 2.9%. Meanwhile, the Chinese special administrative region’s unemployment count ticked up from 3.2% to 3.3%. On the other hand, the recently released jobless claims figures still failed to give the US dollar a lift in sessions. The US Department of Labor issued yesterday the country’s initial jobless claims which rose to 211K from 205K. Although, despite the spike, the figures still came in lower-than-expected.
The improvements in Singapore’s economy is paving the way for USDSGD bears to pull the pair even further below in the market. The downtrend continues for the pair as the Singaporean dollar remains determined to force the US dollar to its support levels. Actually, Singapore is currently celebrating the Chinese New Year’s Eve today. SG’s Department of Statistics issued yesterday the December consumer price index which grew from 0.6% to 0.8% on a year-over-year basis. The country’s CPI results also came in higher than the 0.7% turnout that was forecasted prior. Aside from that, Singapore’s non-oil exports and retail sales figures also showed improvement according to official reports. On the other hand, the US manufacturing and services PMIs are both scheduled today, and both are expected to show slight improvements. Still, that doesn’t assure that it will give bulls the strength to prevent the USDSGD pair from tumbling further.
The deadly coronavirus spreading in China that’s scrapping the country’s New Year celebrations is also taking a toll on the Chinese yuan. Local authorities already widened the strict travel lockdown in central China and are heavily patrolling a fencing system to its citizens. Aside from Wuhan, another Chinese city, Huanggang, is going into lockdown. With the virus weighing on bears, the pair will most likely continue its upward momentum in sessions. In that case, if bulls remain determined, the USDCNH pair would climb its resistance by the first week of February. However, turbulence lies ahead of the greenback as it’s set to face several hindrances that could slow down the pair’s climb. Still, investors are hoping to receive support from the US manufacturing and services PMIs scheduled to be released today. If the results show improvement, the greenback will have a brighter chance of a strong surge against the Chinese yuan.
As Asian currencies continue to take hits from the fatal Wuhan virus, the Indian rupee wasn’t spared. Fortunately for bears, its widely believed that the US dollar’s run won’t last long. Suggesting that the pair is expected to drop and reach its support levels by the first few days of February. The greenback is expected to retreat as some of the effects of the US-China trade deal, which was signed earlier this month, will continue to limit its gains. Aside from that, bulls are slowing down and are preparing for the scheduled FOMC statement and the official decision of the US Federal Reserves for its interest rates. The Fed’s announcement is due next week and it is expected that they will leave their interest rates unmoved at 1.75%. If that would be the case, the US dollar could actually continue to weaken against the Indian rupee, allowing bears to take the pair lower in trading sessions.