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Trade war uncertainties and the discouraging factory PMI places the US dollar in deep waters against the euro in trading sessions. The pair would continue to have an upward run if the US President decides to push new tariffs on Chinese goods if Beijing and Washington fail to reach an agreement before December 15. Just yesterday, the US Commerce Secretary said that the President is willing to slap an additional 15% sanction on selected goods. The US dollar took a bad hit which sent the pair soaring yesterday, although its drive has started to cool down today. However, the pair is just set to bounce off and isn’t expected to break past its resistance level before Christmas as single currency bulls will face new troubles before the holidays. Brewing issues from the bloc will hinder the pair from break through its resistance level before the year ends. Problems, mainly in the eurozone’s biggest economy, Germany, will pose a problem for the pair’s long-term rally.
The decision of the Reserve Bank of Australia has placed the Euro to Australian dollar pair in a tough position. As the Aussie regains its footing, the pair is bound to reach its support levels soon this December. The RBA announced earlier today that its official cash rate will not hike or ease and remain at an all-time low of 0.75% at least until February 2020. In its last meeting for 2019, the RBA is applying a wait-and-see strategy, which means holding its interest rates at current levels after three rate cuts this year, back in June, July, and October. Reserve Bank of Australia Governor Philip Lowe said that the overall outlook of the global economy is still “reasonable” that’s why the bank opted to hold first. In his official statement, Lowe emphasized that after the three “soft patch”, referring to the cuts, the Australian economy has now made a “gentle” turn upward and is set to pick up growth in the coming years.
NZDJPY advances upward in sessions despite the drop in New Zealand’s third quarter trade volumes yesterday. Bulls have finally broken through the somewhat minimal movements of the pair, taking advantage of the pressure under the New Zealand dollar. The kiwi now has good upward momentum and it is also benefiting from the RBA’s recent decision to hold on to current rates. According to an expert, if the Reserve Bank of Australia opted to maintain rates, traders shouldn’t worry about another easing from the Reserve Bank of New Zealand. The NZD is now at its highest record since August this year. Actually, the pair’s resistance is still far and the NZDJPY will have a tough time climbing it. However, the NZDJPY pair isn’t expected to tear past its resistance level as trade war uncertainties loom over and give more appeal to safe-haven assets such as the Japanese yen.
As of the moment, the AUDNZD trading pair is trying to recover some of its losses as the Aussie gains support from the recent decision of the Reserve Bank of Australia. However, the pair is still bound to hit its support levels before the year ends as kiwi traders are also confident about the decision of their central bank. Reinforcement for the kiwi is also expected after New Zealand Finance Minister Grant Robertson said over the weekend that a major infrastructure spending plan is on the way and will be revealed in detail along with the proposed budget policy statement on December 11. According to the New Zealand official, the new program will future proof the country’s economy, further giving confidence to kiwi traders. Of course, the government is taking advantage of the current low debt levels and the relatively low interest rates to pump out programs to support the economy and the currency.