 Dollar rally shows no signs of stopping in early US session, and the greenback it buoyed slightly by stronger than expected data on durable goods orders. Yet, looming in the background is the potential for the fourth US government shutdown in the last ten years, a scenario that's only days away. Minneapolis Fed President Neel Kashkari weighed in on the situation, stating a shutdown could "slow the economy," suggesting that Fed "might then have to do less" to fight inflation. However, there's another side to the coin: a delay in the release of economic data could complicate Fed's decision-making process. All eyes are now turned to Washington, keenly observing the next moves. In the wider currency markets, Australian Dollar is struggling, particularly after the news that China Evergrande Group's chairman has been put under police watch, as per Bloomberg reports. This adds another layer of uncertainty about the company's future, and by extension, impacts sentiment towards China's broader property sector, subsequently placing pressure on Aussie. European currencies are also navigating choppy waters, with Swiss Franc being notably weaker. Contrarily, Canadian Dollar trails just behind Dollar in terms of strength, followed by Japanese Yen. Technically, AUD/CAD is resuming recent down trend by breaking through 0.8622 support. Next target the key support zone between 0.8569 and 61.8% projection projection of 0.9545 to 0.8781 from 0.9054 at 0.8582. Decisive break there could prompt downside acceleration towards 100% projection at 0.8290. The unfolding scenario is intrinsically tied to sentiment shifts in China and the stability of oil prices, factors that will critically influence the pair's directional momentum. In Europe, at the time of writing, FTSE is up 0.01%. DAX is down -0.01%. CAC is up 0.11%. Germany 10-year yield is down -0.0025 at 2.783. Earlier in Asia, Nikkei rose 0.18%. Hong Kong HSI rose 0.83%. China Shanghai SSE rose 0.16%. Singapore Strait Times dropped -0.47%. Japan 10-year JGB yield dropped -0.0062 to 0.740. |
