The US declined on Tuesday in Asia. It has fallen to the lowest level in six weeks because the investors are waiting for the response from the chairman of the USA Federal Reserve, Jerome Powell. It is especially about the inflation aspect.
The index of the dollar which tracks Greenback to other main currencies declined by 0.14%. It became 89.957. The pair of USD/JPY also has the same trend. It slightly declined by 0.11% and became 104.94. The yen is now becoming a currency with the worst performance.
Why? It is because of its sensitivity to the US price decline and stabile to the dollar. In fact, not all currency pairs in the market have a downward trend at the moment. Some are still able to rise and show the great movement. Below is further information.
The Currency Pair Movement Data
The AUD/USD pair slightly increased by 0.15% and became 0.7926. Meanwhile, the NZD/USD has a different situation. It declined by 0.04% and reached 0.7325. In the other case, the GBP/USD rose slightly by 0.15%. It reached 1.4083 positions.
It means that the GBP/USD is still above the number of 1.4 until now. The surprising news comes from Pound. That currency strengthened almost 3% in 2021. The best moment was when England launched its COVID-19 vaccine program which was quick and effective.
That great step makes people rely on the economic recovery in that country. That is why; it brings a good impact on Pound Sterling too since people and investors do not hesitate to buy that currency. However, a different thing happened in Europa.
In Europe, Euro is managed to re-check the resistance around the number of $ 1.2220 after a small increase to $1.2165. Meanwhile, risky currency such as AUD and NZD increased to their highest level for almost three years because of several reasons.
Global Inflation Concerns Begin to Emerge
The risky currencies could grow up and reached their highest level because of some causes. One of them is because the material prices such as oil, wood, copper, and milk powder also increased. That profit has sparked certain concerns that may be happened.
It is especially the concern of global inflation increase and the massive sales action on the obligation which has the long date period. Powell will speak in front of congress. Many investors hope that The Fed will not respond to higher inflation.
That must be supported by the increase of interest rate that should be done soon. It has the potential to calm the obligation market and at last, that could cause the dollar to fall further. However, an analyst thought that Powell will talk about the negative sides.
There are so many risks and the US economy is further from the full job fields. Aside from that, the oil price is now increasing amidst the slow United States production. That happened on Tuesday where Texas closed its production because of the cold season.
Positive Momentum for Oil Commodity
The shale oil producer in South America needs at least two weeks to start the production again. It is for more than 2 million barrels per day (BPD) from the closed raw oil production because of the cold weather. The pipes were frozen.
Furthermore, the electricity distributions were not going well. Those conditions can slow down their recovery. Based on the data, the Brent raw oil was up by 28 cents or 0.4%. It became % 65.52 per barrel. The positive momentum is continued to happen for oil.
In the market, investors show that they have a bullish overview so far. Based on the significant oil prices revision informed last night, the situation above May has been contributing to a rally of more than 3%.
