DOLLAR SLUMPS AS U.S REPUBLICAN SENATORS DELAY TRUMP'S CORPORATE TAX CUT
DOLLAR UNDER PRESSURE
The U.S dollar fell index against a broad-basket of currencies this week, as Louisiana Senator Bill Cassidy confirmed that Senate Republicans had planned to propose a delay in the cut to the U.S corporate tax rate, from 35 percent to 20 percent, until 2019.
Risk-off trading sentiment returned to financial markets after the delay was confirmed, as investors fear the delay could hamper the United States economic growth in 2018. The USDJPY pair fell towards the 113 level, as traders moved into the perceived safe haven of the Japanese yen.
BITCOIN NEW ALL-TIME HIGH
The price of the digital currency Bitcoin set yet another all-time high this week, touching $7,878 per Bitcoin, in the build-up towards the proposed Segwit2x software change due to be implemented in mid-November. However, Bitcoins fortunes soon changed, as reports surfaced that the proposal would be abandoned. The news caused a sudden sell-off in Bitcoin, as recent buyers realized that the change would be a negative development, sending the value plummeting back down towards $7,200 mark.
The sudden move away from Bitcoin, caused investors to shift in other cryptocurrencies, sending the price of Ethereum, Ripple and Dash much higher on the trading week.
KIWI RECEIVES A BOOST
The Reserve Bank of New Zealand left its official cash rate unchanged at 1.75% this week, and reconfirmed its commitment to keeping rates low. RBNZ Governor Grant Spencer noted that a cooling housing market, and uncertainty about the effect of new government's policies warranted caution.
Foreign exchange markets bought the New Zealand dollar, after the Reserve Bank raised its forecast for the nations inflation outlook by one fiscal quarter. The NZDUSD pair continued to recover this week, further supported by U.S dollar weakness, with the pair rising as high as 0.6979.
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Should the NZDUSD pair continue to trade above the 0.6910 level, further upside towards 0.6990 and 0.7050 remains likely.
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If sellers push price-action below the key 0.6910 level, a decline towards the 0.6880 and 0.6850 levels appears likely.
RBA ON HOLD
The Reserve Bank of Australia kept its official cash rate on hold this week, holding rates at a record low, for the fifteenth consecutive month. The RBA last changed its monetary policy settings in August 2016, when rates were edged down 0.25 percentage points, to the current low of 1.5 percent.
The Reserve Bank's Monetary Policy Statement continued to strike a dovish tone, with Australian policy makers slightly downgrading the outlook for economic growth in Australia, while acknowledging only a gradual rise in headline inflation. The AUDUSD continued to move in a tight trading-range for much of the week, holding price-action between 0.7650 and 0.7710 technical levels.
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Should buyers push price-action above the 0.7710 level, further upside towards the 0.7745 and 0.7810 levels appears most likely.
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Should sellers push price-action below the key 0.7650 level, a decline towards the 0.7610 and 0.7580 technical levels remains likely.