The dollar struggles to regain the upside momentum as safe-haven demand has cooled
US stocks bounced on Tuesday as investors digested Powell’s latest hawkish comments on interest rates. As such, equities resumed last week’s ascent amid lack of significant news on the geopolitical front. The Dow Jones rose 0.7%, the S&P 500 gained 1.1% and the Nasdaq Composite jumped nearly 2%. In individual stocks, Nike shares finished 2.2% higher to gain more than 5% in extended trading after the company reported strong results for its fiscal third quarter due to robust demand in North America.
Today in Asia, equities were mostly higher to hit three-week highs, with tech stocks leading gains. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6%, while Nikkei 225 rallied 3% to touch a two-month top. Hang Seng in Hong Kong added 1.21% while Shanghai Composite advanced just 0.34% amid lingering concerns over COVID-19 cases in China. US stock index futures retain positive tone in early pre-market trading, suggesting risk demand will persist later in the day.
Meanwhile, the dollar struggles to regain the upside momentum as safe-haven demand has cooled since a short-lived rally that took the USD index to local tops around 99.00 after Fed Powell’s comments. In recent trading, however, the greenback turned slightly positive on the day to settle above 98.50. As such, EURUSD keeps flirting with the descending 20-DMA, with bearish risks persisting after last week’s rejection from local highs above 1.1100. Should the USD index retarget 99.00, the pair will threaten the 1.1000 figure again.
Elsewhere, gold prices stay directionless above $1,900, deriving some support around $1,910. The precious metal has settled below the 20-DMA, with downside risks persisting as long as this moving average, today at $1,946, acts as resistance zone. It looks like the bullion will continue to tread water in the current range before deciding on the further direction.