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U.S. Dollar Rebounds From Tuesday's Weakness

U.S. Dollar Rebounds From Tuesday's Weakness

The U.S. dollar strengthened against its major counterparts in the European session on Wednesday, after falling on the impeachment news against U.S. President Donald Trump yesterday.

House Speaker Nancy Pelosi’s announcement that Democrats would launch a formal impeachment inquiry into President Donald Trump sent the currency lower on Tuesday.

The impeachment proceedings came in the wake of allegations that Trump had pressured Ukraine’s government to investigate Democratic rival Joe Biden.

Trump tweeted that he would release the transcript of the phone call to the Ukrainian President.

Democrats require two-thirds of Senators to convict Trump following impeachment inquiry, which is a tough task in the Republican-controlled Senate.

The currency has been trading modestly higher against its major opponents in the previous session.

The greenback edged up to 107.55 against the yen, from a low of 106.99 hit at 5:00 pm ET. On the upside, 110.00 is possibly seen as the next resistance for the greenback.

Data from the Bank of Japan showed that producer prices in Japan were unchanged in August – in line with expectations following the upwardly revised 0.2 percent increase in July.

On a yearly basis, producer prices were up 0.6 percent – exceeding forecasts for 0.5 percent but unchanged from the July reading following an upward revision from 0.5 percent.

The greenback reversed from its early low of 0.9850 against the franc, rising to 0.9879. The greenback is likely to find resistance around the 1.00 level.

Reversing from its early lows of 1.1023 against the euro and 1.3235 against the loonie, the greenback appreciated to 2-day highs of 1.0977 and 1.3235, respectively. The next possible resistance for the greenback is seen around 1.08 against the euro and 1.35 against the loonie.

The greenback strengthened to near a 2-week high of 1.2372 against the pound and a fresh 3-week high of 0.6750 against the aussie, off its previous lows of 1.2496 and 0.6804, respectively. The greenback is poised to find resistance around 1.21 against the pound and 0.625 against the aussie.

Having declined to a 1-week low of 0.6348 against the kiwi at 10:30 pm ET, the greenback bounced off and rose to a 2-day high of 0.6285. Next key resistance for the greenback is seen around the 0.60 level.

New Zealand’s central bank left its key interest rate unchanged after cutting the rate by 50 basis points in August.

The Monetary Policy Committee of Reserve Bank of New Zealand headed by Adrian Orr decided to hold the Official Cash Rate at 1.0 percent.

The U.S. new home sales for August will be released at 10:00 am ET.

The material has been provided by InstaForex Company – www.instaforex.com