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The dollar retreated on Monday as China’s re-opening boosted risk sentiment and weighed on safe-haven bids. The Australian dollar gained some ground as one of the leading trade partners; China re-opens its borders. Japan’s Prime Minister is set to meet France’s President Macron at Notre Dame as he has started his tour of Europe and North America meeting the G7 leaders following Japan’s takeover of the presidency this year.
AUDUSD gained +0.67% trading above 0.6900 as risk sentiment dominates. Boosting the sentiment was China’s re-opening of its borders and relaxing its strict zero-covid rules. Investors’ hopes of a slower hiking pace by the Fed increased particularly after last week’s upbeat US jobs data. Earlier on Monday, Australian Building Approvals for November dropped to -9.0 against -1.0 expectations. The pair however ignored this downbeat data and may retest 0.7000 if 0.6900 manages to hold.
GBPJPY traded north to start the week with the sterling capitalizing on the positive risk mood on the day. The Japanese Prime Minister’s meeting with France’s President Macron failed to uplift the Yen against its rivals. Traders will be expecting BoE Monetary Policy Committee member Catherine Mann’s speech later in the day. The pair rose +0.59% from 159.50 extending Friday’s gains with near-term resistance at 162.00.
EURCAD tanked by -0.18% despite upbeat economic data from the eurozone and risk-on sentiment. The German Industrial Production came in better than expected in November at 0.2% vs 0.1% surpassing October’s reading of -0.4%. The unemployment rate in the eurozone was unchanged at 6.5% in November. Investor confidence in the Eurozone rose to its highest since June 2022 at -17.5 vs -18.0 expected. Upbeat oil prices helped the CAD against the EUR. The pair’s bulls may need to breach the 1.4350 level to go higher while bears are faced with a challenge at 1.4250 for a steady fall.
European stocks were quite mixed in the mid-European trading session. The FTSE100 was down -0.25% after establishing a high at 7730 on the day and may seek to retest 7650 and 7620in the near term. The CAC40 in France gained +0.09% having retreated from the 6900 level. Further up, bulls may reclaim 700. The DAX index was flat at +0.08% after facing a bullish cap at 14700. A break above may give bulls 14900.
US stock futures traded in positive regions on Monday riding on Dollar weakness. The S&P 500 futures were up +0.40% moving between 3893 and 3920. A pullback to 3800 may be witnessed in the near term. The DJIA futures rose +0.33% and targets may be seen at 34000 if 33700 becomes fragile. Nasdaq 100 futures gained +0.37% and may need to break above 11100 for a stronger rally.
Additionally in commodities, crude oil surged more than 3.00% on China’s re-opening. The move by China boosted the black liquid’s demand outlook and took over recession fears. UK oil gained +3.26% trading in the $80 per barrel range while the $82 level may be a challenge to the upside. The USWTI was up +3.56% from $73.50 per barrel and is a few ticks away from $77 per barrel.
