The ascent is due to a rally in riskier assets amid rising hopes of striking a US-China trade deal after positive comments from the US officials. Global investors are also cheering the news that MSCI has accelerated an increase in China’s weighting in its flagship emerging markets index. Besides, China manufacturing PMI exceeded expectations in February, though remained below the 50 mark.
The pair was ready for a breakthrough but lacked the catalyst due to unstable risk sentiment in the global financial markets. Now, when demand for high-yielding assets reemerged, the safe-haven yen feels uncomfortable, while the buck derives additional support from stronger-than-expected US GDP data and somehow positive Powell’s comments on the economy.
Technically, the pair may challenge the 112.00 resistance in the near term and target the 112.20 area should the price manage to hold above the 111. 40 figure. Another portion of positive US data could open the way higher in the short term. Otherwise, the dollar will see some profit-taking.