The British pound has rallied during the Tuesday session, slamming into the 1.3250 area, an area that was previously support, and as of late, has been resistance.
The USD/CAD pair extends the previous day’s retracement slide from the 1.3965 area, or a nearly four-month high, and attracts some follow-through sellers for the second consecutive day on Wednesday.
Gold is sitting close to eight-day highs of $4,724 early Wednesday amid renewed market optimism on a probable de-escalation of the conflict in the Middle East, bracing for the US ADP Employment Change data for fresh trading impetus.
The Australian Dollar (AUD) remains under sustained downside pressure, dragging AUD/USD to multi-week lows.
The US Dollar keeps benefiting from the Iran war, despite the fiscal hole it adds to the United States’ troubled budget and the chaos it creates for inflation and monetary policy. How come? And more relevantly, will the Greenback preserve its momentum once the Oil war is over?
A simple rule suggests US interest rates should be higher than they are today. Yet the Federal Reserve is standing still. That gap between theory and reality is becoming one of the more interesting tensions in global markets and one that could shape the next move in the US Dollar.