Forex Today: Dollar oversold but still weak

FXStreet Team FXStreet

Here is what you need to know on Monday, August 31:

The dollar plunged on Friday in the aftermaths of the US Powell’s announcement last week. The Federal Reserve shifted the monetary policy, putting more emphasis on employment and saying it could let inflation run beyond the 2.0% target.

Japanese PM Shinzo Abe resigned over health issues. After eight years leading the country, Abe´s decision to step down spurred risk aversion by the end of the week. Still, he said that he would continue to lead the country until a new PM is approved.

The Pound could suffer a setback at the beginning of the week, amid news indicating that UK’s Finance Minister Sunak is considering a set of tax increases to compensate coronavirus pandemic extraordinary expenses. However, other cabinet members opposed to such a move, but instead want to consider spending cuts.

Wall Street closed with gains, despite risk-aversion dominated the first half of the day, following Abe’s resignation. US Treasury yields eased in the last trading day of the week but closed it with gains.

Gold closed with gains around $1,964 a troy ounce, after falling in the previous two weeks. Crude oil prices remained stable.

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Ethereum outperforms as crypto bulls dominate

Author

FXStreet Team

FXStreet

EUR/USD climbs to two-week highs beyond 1.1900

EUR/USD is keeping its foot on the gas at the start of the week, reclaiming the 1.1900 barrier and above on Monday. The US Dollar remains on the back foot, with traders reluctant to step in ahead of Wednesday’s key January jobs report, allowing the pair to extend its upward grind for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold treads water around $5,000

Gold is trading in an inconclusive fashion around the key $5,000 mark on Monday week. Support is coming from fresh signs of further buying from the PBoC, while expectations that the Fed could turn more dovish, alongside concerns over its independence, keep the demand for the precious metal running.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.