The US Dollar was seen trading higher against the Euro this morning, continuing a trend that began in the late Asian trading hours. The EUR/USD pair traded up by 0.2% to 1.082 as market participants showed some optimism following the European Central Bank chief’s dovish statements on monetary policy last week. It is widely anticipated that the ECB will announce fresh easing measures during its upcoming meeting in March.
Disappointing data in Australia
Meanwhile, the New Zealand dollar pared early day gains after strengthening against the greenback. Currency traders are now awaiting signals on another rate hike from the Federal Reserve. NZD/USD shed 0.25% and was trading near 0.6476 today. The pair has support at 0.6409 and resistance at 0.6563.
Like the New Zealand dollar, the Australian dollar also shed its gains and was trading weaker against the dollar. The pressure on the Australian dollar built after data showed muted business confidence in the region, firming up demand for the world’s reserve currency. AUD/USD was down by as much as 0.36% to 0.6977. The pair’s support and resistance levels are at 0.6945 and 0.7088 respectively. In the early morning today, the Australia’s National Bank reported that the business confidence index slipped to 3 from 5 in December.
On the look out for the Federal Reserve’s statement
Divergent monetary policies between the Federal Reserve and other central banks are giving the US dollar some strength. Investors are now closely awaiting the Federal Reserve’s update on policy direction, which is expected to be released on Wednesday. Investors will look for any signal from the Fed on the pace of interest rate hikes this year, if any.
The U.S. dollar traded higher against the British Pound as well. GBP/USD was seen trading marginally down by 0.04% to 1.4259. The U.S. Dollar index is now at 99.39, reflecting a loss of 0.2% from Friday’s close.