D ESPITE widespread dollar weakness for the US greenback against the Mexican Peso, the pair has not done so badly in the last month and now sits on a good support level offering a possible buying opportunity. Capital CFDs quotes a price of peso12.5500-peso12.5700 for dollar-peso.
The Bank of Japan announced yesterday that it will extend its quantitative easing (QE) scheme and the central bank cut interest rates and the dollar-yen bounced in trading. Investors will be thinking ahead to Friday’s non-farm payrolls figures for a clearer picture on the Fed’s next move. A US QE expansion could see the dollar’s strengthening undone. Cantor Index offers Daily dollar-yen ¥8342–¥8345.
The Reserve Bank of Australia left interest rates unchanged at 4.5 per cent yesterday and didn’t seem overly hawkish regarding higher interest rates in the future. This sent Australian dollar-dollar crashing 120 basis points in a matter of hours to the 15-day exponential moving average at Au$0.9643 before settling around Au$0.960. The charts look bearish and a dip to Au$0.9470 and Au$0.9350 is a possibility. Spread Co offers a spread of Au$0.9594–Au$0.9596.
Sterling has suffered after talk of further QE. It looked to be soaring away against the euro only a few weeks ago but suffered a rough September, with sterling-euro retreating to the well-established support level. But sterling could bounce from here. Capital Spreads offers a price of €1.1500-€1.1504 on sterling-euro.
The threat of further US?QE is adding to the dollar exodus and the Swiss franc continues to be a beneficiary. But there has been a degree of profit taking and the question is whether a push to fresh lows can be sustained. The pair looks overbought but with traders continuing to seek out safe havens and markets far from normal, the traditional rules don’t necessarily apply. The current IG Index price on dollar-Swiss franc is SFr0.9695-SFr0.9697.