On Monday, the 7th of January, 2019, the American dollar slid severely, as stock markets remained riant on Federal Reserve Chairman, Jerome Powell’s dovish rate talk.
Last week, amid intense pressure from US policymakers including the US president Donald Trump, the US central had to step away from its much-debated monetary policy and interest rate hike, despite the inflation target had been closer to central bank’s target (1.90 percent while the target was 2 percent).
The aggressive rate hike had met with an execrable extent of scrutiny and resulted a shocking outcome of US stocks in 2018. However, on Friday, Jan 4th, Powell had said that the Federal Reserve would either halt or pause its rate hike cycle in 2019.
Upon arrival of the news, the American dollar dwindled sharply, as it has currently been retesting its Nov. 15th low at 95.16. On Monday’s market closure, the American dollar had plunged against all of the seven major currencies, while Euro posted a gain of 0.71 percent against American dollar and the GBP rose 0.31 percent.
The gain was mostly led by the Australian dollar, which posted a surge of 1.78 percent against US dollar. So far, the outlook of American dollar remains highly bearish and its initial support level resides at 94.35, while its critical support level is still clinging on to 93.35 region, followed by a strong US economic data.