Market News

USD/JPY maintained its footing in pre-European trading and last traded near its daily high at 113.60. After overnight volatile price movements, the USD/JPY pair gained some positive dynamics on Wednesday and found support from several factors. Global risk sentiment has stabilized slightly as investors decide to wait and see if the new strain of Omicron corona virus will ultimately hamper the economic recovery. This is evidenced by a good recovery in the stock market, which weakened the safe Japanese yen and acted as a headwind for major currencies.

Key Notes:

The combination of supporting factors continued to help USD/JPY recover from a two-month low.
A modest recovery in risk sentiment eroded the safe yen and maintained the favor.
The bulls also sensed a rise in US bond yields, but a devaluation of the US dollar could limit returns

The Bulls also turned to a subsequent rebound in US Treasury yields, helped by restrictive comments from Federal Reserve Chairman Jerome Powell. When testifying in front of the Senate Banking Commission, Powell said it was time to get off the floor and it would be appropriate to consider ending the asset purchase expansion perhaps a few months earlier. He added that the risk of persistently high inflation is increasing and high inflation is expected by next year.

In response to Chairman Powell’s remarks, short-term financial markets have begun evaluating the possibility of a rate hike of at least 50 basis points through the end of 2022. This, in turn, was seen as a key factor in continuing to support US bond yields. Despite interest rate hikes driven by more aggressive Fed tightening, the US dollar has so far struggled to entice meaningful purchases. This could deter traders from displaying aggressive bullishness and limit the continued recovery of the USD/JPY pair from its near two-month low. Market participants are now eagerly awaiting US economic reports including ADP report and ISM manufacturing PMI. A joint speech by FRS Chairman Jerome Powell and US Treasury Secretary Janet Yellen at the House Financial Services Committee is also expected to affect the strength of the dollar. Going forward, traders will consider developments surrounding the coronavirus saga and broader market risk sentiment to capitalize on some of the opportunities associated with the USD/JPY pair.

7:28 am

Forex News

November 30, 2021

Options market USD/CAD turns most bearish in last two weeks & expecting volatility in future

WTI crude fell to $70.40 in an early two-day rally on Tuesday. While the 2-day symmetrical triangle limits Black Gold’s recent move, adding 50 HMA to the RSI’s decline and the upper barrier is encouraging for sellers. However, a clear downward break of the triangular support level near $69.20 at the time of issue was necessary for oil sellers to regain control.

After that, a Friday low of $68.30 will attract the market’s attention before lowering the WTI bearish to a September low of around $67 and a July low of around $65. On the other hand, the rise in commodity prices will be a nutritious nut around $72.00 including the triangular resistance and 50 HMA. Even if the price crosses $72, Friday’s high of $74 could provide an additional filter before oil moves up to $77.60. This implies an upside on the 25th of November.

The options market scenario supports USDCAD sellers ahead of today’s testimony of Canada’s GDP and Federal Reserve Chairman Jerome Powell. The reason for the bearish trend may be related to the cautious optimism of the market on Monday. However, recent doubts about the ability of the vaccine to tame a South African Covid variant known as Omicron support US $ / Canadian dollar buyers. With that in mind, the USD / CAD recorded a 0.30% daytime rise of about 1.2790 at the time of the press.

10:10 am

Forex News

November 29, 2021

GBP/USD remains weak below 1.3350 amid omicron concerns and Brexit concerns

GBP/USD is trading moderately below 1.3350, consolidating from its 11-month low of 1.3278, with risk sentiment improving slightly. Despite the risk reset, the risk remains downward biased against the majors as they continue to face the latest Omicron covid and ongoing Brexit issues.

Risk sentiment took a hit in early Asia, and concerns over the latest covid variant shook the market, propelling the overall rebound of the US dollar. South Africa’s recent surge in COVID-19 cases, which appears to have been triggered by a new strain, is urging countries around the world to impose new restrictions. However, Dror Mezorah, head of the coronavirus department at Hadassah University Hospital in Ein Karem, said the clinical status of people infected with Omicron is encouraging.

Despite risk recovery, sentiment around the pound can remain compromised by ongoing Brexit concerns. Vice-President of the European Commission, Margaritis Schinas, said Britain needed to resolve the post-Brexit immigration issue on Saturday.

Meanwhile, French President Emmanuel Macron attacked British Prime Minister Boris Johnson in a letter tweeted Friday and accused him of being “not serious.” This is in light of the ongoing tensions surrounding the Franco-British fishery. We will continue to lead the update of Omicron Covid variants and their impact on risk sentiment on Monday’s UK and US economic calendars. Investors are trying to reassess the Bank of England’s (BOE) rate hike expectations in light of recent Covid claims. This could be a further downside to the UK currency.

The dollar was up on Monday morning in Asia, with investors slowly regaining their risk appetite after the discovery of the omicron COVID-19 variant. However, caution remained as research continues on this new strain.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.19% to 96.290 by 10:52 PM ET (3:52 AM GMT), after falling to a one-week low of 95.973 on Friday. Although the safe-haven U.S. currency is poised to benefit from the uncertainty, the outlook for when the U.S. Federal Reserve and other key central banks will hike interest rates is now uncertain.

6:38 am

Forex News

November 27, 2021

How to Choose the Right Forex Broker

If you are a new trader about to start trading Forex then you are having the most confusing time of the process, trying to find the right broker. Worry no more, this article has some important tips which will make the process much easier for you.

To start before you figure out anything else about the company make sure the company is registered and licensed to the corresponding regulatory bodies. A registered company will have their license figure up on the website, and you can check the license number on the website of the power it should be listed on. If that does not check up then the company could be cheating, and likely to scam you out of your money.

Every Forex broker gives various prices for each currency pair, some offer much lower prices for their pairs and that gives you the chance to trade with more extra currency pairs, and do overall more trading with less money. A lot more factors play into the prices, and several traders may prefer to focus on different things, and over time you may find it more profitable to trade with companies who offer higher spreads but better services, for a start however you want to invest as little as possible, so go for cheaper brokers.

Don’t ever start trading with a real account before using the demo account of the company.

Not only will this give you the chance to practice before investing money but it will give you the chance to try out the platform and the company and decide if it is right for you.

6:01 am

Forex News

November 26, 2021

GBP/JPY: Brexit, full-fledged bear dominating below 153.00 on COVID-19 chatter

GBP/JPY licks the cut at the 152.70 area after hitting a week-long high before hitting a two-week low of 152.47 ahead of the London opening on Friday. The Cross saw a double attack as it served food to bears amid fears of coronavirus and Brexit-related concerns. 4,444 French fishermen prepare to shut down Channel Tunnels and major ports on Friday to celebrate their disappointment over the UK’s fishing license regulations.

The British government has already urged politicians not to use illegal means, but this is unlikely to stop France’s outrage.
On the positive side, Maroš Šefchovic’s visit to London, an EU exit officer, is a British diplomat if both parties agree on a border protocol with Northern Ireland (NI), which has recently shown positive progress. It is worth noting that the previous day’s refusal of Bank of England (BOE) Governor Andrew Bailey’s inflation concerns reduces the likelihood of a rate hike and also affect GBP / JPY prices.
Or, Japan’s recent announcement and Moody’s rating outlook are adding to more robust inflation data to further drive the yen’s appreciation.

“If a new coronavirus variant is identified, we will revisit border control as needed,” said Hirokazu Matsuno, Chief Cabinet Secretary of Japan, according to Reuters. As for data, Japan’s consumer price index (CPI) rose from 0.1% year-on-year to 0.5% in November, and fresh food CPI fell from 0.4% in market forecasts to 0.3%. 0, 1% faster. In addition, CPI ex Food and Energy were 0.3% of expectations on an annual basis.

Elsewhere, concerns about the Fed’s rate hikes at the wrong time are squeezing market sentiment and supporting the US dollar’s demand for safe haven. However, the Covid19 issue has spread outside Europe’s first horror zone due to concerns about a variant of the official name B.1.1.529, which is related to South Africa and is unaffected by the vaccine. For this reason, the World Health Organization (WHO) and UKHSA held a special session on Friday.

Sentiment on 10-year Treasuries yields on US Treasuries fell 8 basis points (bps) to 1.565%, extending Wednesday’s recession from its monthly highs and S & P 500 futures falling 1.0% at the latest.
In further courses, risk catalysts may keep the driver’s seat on a bright calendar. On the positive side, EU Brexit Secretary Maros Sefchovic’s visit to London could please British diplomats if the parties agree to the Northern Ireland (NI) Border Protocol, which has recently made positive progress. At inflation, it is worth noting that Bank of England (BOE) Governor Andrew Bailey fears that the likelihood of a rate hike has diminished as well as pressure on GBP/JPY prices.

Or, Japan’s latest unlocking and credit rating agency Moody’s forecasts, combined with strong inflation data, should help the yen rise further. Japan’s Chief Cabinet Secretary Hirokazu Matsuno told Reuters in an interview with Reuters: “If a new strain of the coronavirus is confirmed, we will review border controls if necessary.” Moody’s, a global credit rating agency, said in a recent credit rating update, “Japan’s stable outlook reflects a gloomy view that Japan’s fundamental economic and institutional capabilities will support its recovery.” According to data, Tokyo’s consumer price index (CPI) data for November rose to 0.5% on an annualized basis from 0.1% in the previous year, while the consumer price index excluding fresh food fell to 0.3% from the market consensus of 0.4%. as 0.1%. Prior. In addition, the CPI, excluding food and energy, increased by 0.3% annually, in line with expectations.

Elsewhere, concerns about a rate hike by the Fed at the wrong time are affecting market sentiment and supporting demand for the US dollar as a safe haven. However, concerns about covid19 have spread beyond Europe’s original feared areas due to concerns about the officially named B.1.1.529 strain, which is related to South Africa and is immune to the vaccine. For the same reason, the World Health Organization (WHO) and UKHSA convened a special meeting on Friday. The 10-year U.S. Treasury yield fell 8 basis points to 1.565%, continuing its decline Wednesday from its one-month high, while S&P 500 futures fell 1.0% at the latest.

7:11 am

Forex News

November 25, 2021

EUR/GBP hovers around 0.8400, ECB’s Lagarde and BOE’s Bailey keep an eye on

EUR/GBP remained bearish in the early hours of Thursday morning in Europe. Cross-currency pairs are approaching their annual lows recorded on Monday as fears over coronavirus in the eurozone are resurfaced. Record high cases in Germany, followed by Austria and the Netherlands, have resulted in multiple warnings reminiscent of the blockade in the region. Coronavirus infections broke records in parts of Europe on Wednesday as Europe became the epicenter of the epidemic that caused new travel restrictions. It is worth noting that the resurgence of the virus eases pressure on the European Central Bank (ECB) to follow the Western banks and thus puts further downward pressure on EUR/GBP.

In a recent commentary, Boštjan Vasle, a member of the Governors’ Council and Governor of the Central Bank of Slovenia, along with politicians Fabio Panetta and Robert Holzmann, ignored the rate hike negotiations. In contrast, European Central Bank governor and Bundesbank president Jens Weidmann said on Wednesday that inflation risks dominate in Germany and the rest of the eurozone. With block wrestling with covid, the UK is not far behind as daily infections exceed 43,000 and virus deaths drop to 149. However, Sky News cites UK health experts to point out the risk of a surge in COVID-19 cases in the new year.

Coronavirus pessimism and consequently increased pressure on the European Central Bank (ECB) to expand monetary easing, and in contrast to optimistic UK fundamentals, recent headlines on Brexit suggest the resilience of the pound I support it. Downing Street spokesperson #10 said there were significant differences between the UK and EU views on Northern Ireland, but British Prime Minister Boris Johnson’s willingness to work hard to address the issue is encouraging in the market. . But British politicians also agreed with Irish Prime Minister Michael Martin that Article 16 would not come into force until negotiations broke down.

However, a light calendar with only US public holidays and Germany’s final third-quarter GDP figures is expected to confirm the 1.8% forecast, challenging the EUR/GBP move ahead of the speeches by ECB Governor Christine Lagarde and Bank of England Governor Andrew Bailey. .

Bailey looks set to support the latest improvements in UK fundamentals to bolster hawkish hopes, but ECB’s Lagarde may risk worsening block economy due to coronavirus, which could put pressure on EUR/GBP prices can.

7:21 am

Forex News

November 24, 2021

USD/JPY rise above 115.00 when bullish track hits 44-month high

The USD/JPY bull is breathing around 115.10 after a spike that broke a multi-month high earlier on Wednesday. At the same time, the yen is struggling to extend its two-day rally amid falling US Treasury yields. The 10-year U.S. Treasury yield fell 0.8 basis points (bps) from its highest level since October 22, or about 1.65% at the latest, amid a lack of significant data/events. Yields jumped to a one-month high before mixed US data stopped bonds rising. Geopolitical concerns and recent COVID-19 concerns appear to be playing a challenging role for USD/JPY buyers in recent times.

Japan’s geopolitical tensions with China are escalating over issues related to Vietnam. The defense ministers of Japan and Vietnam reached an agreement on the 10th that “they are opposed to secretly mentioning the sea in response to a unilateral attempt to change the status quo in the region said Kyodo News.” The Netherlands is experiencing a COVID-19 crisis and has recently announced regional closures, but the situation has not improved, driving demand for the Japanese yen, especially amid falling yields.

“The Netherlands started transporting COVID-19 patients across the border to Germany on Tuesday to ease pressure on Dutch hospitals, which are scaling back regular care to deal with a surge in COVID-19 cases,” said Reuters. Also positive for the JPY could be the improvement in COVID-19 conditions at home and the government’s readiness to help the nation overcome the pandemic led economic hardships. Recently, Nikkei reported that Japan will allocate about 600 billion yen ($5.2 billion) from its fiscal 2021 supplementary budget to support advanced semiconductor manufacturers including the world’s No. 1 contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC), per Reuters. Against this backdrop, US equity futures are struggling to maintain their rebound from their two-week lows, while Asia Pacific stocks are trading alongside the Japanese Nikkei 225, down 0.80% at press time. USD/JPY could see further declines when considering the consolidation of returns along with a cautious outlook ahead of major US data/events.

Recent FOMC minutes and October PCE core inflation are among the catalysts for the US as expectations for a Fed rate hike rise. Against this backdrop, US equity futures are struggling to maintain their rebound from their two-week lows, while Asia Pacific stocks are trading alongside the Japanese Nikkei 225, down 0.80% at press time. USD/JPY could see further declines when considering the consolidation of returns along with a cautious outlook ahead of major US data/events.

7:09 am

Economic News

October 20, 2022

Canadian Inflation Higher than Expected

Canadian CPI for September was 6.9% YoY vs and expectation of 6.8% YoY and an August reading of 7%. The headline number was higher than expectations, it was the third straight month the inflation reading has declined since reaching a 39 year high in June. However, the core CPI increased to 6% YoY va an expectation of a drop to 5.7% YoY and an August reading of 5.8% YoY. The Canadian CPI release comes just hours after the UK reported an uptick in its inflation to 10.1% YoY.

As inflation continues to remain high in Canada, will the BOC be less aggressive, or pivot , as some have suggested after the RBA reduced its pace of rate increases at its last meeting? Expectations are closer to a 75bps rate hike than a 50bps rate hike when BOC meetings next Wednesday. Governor Macklem spoke earlier in the month and was hawkish, noting that further interest rate increases and warranted to tame inflation. Today’s inflation report reinforces that view. In addition, September’s employment Change supports a higher rate hike, as the Unemployment Rate dropped from 5.4% to 5.2%.

USD/CAD had been in an orderly rising channel since early April, when the pair was trading near 1.2400. On September 21st , the pair broke above the top trendline of the channel near 1.3425 and the pair hasn’t moved back inside since. USD/CAD moved to horizontal resistance from April 2020 near 1.3850, as the RSI moved into overbought territory, then pulled back to retest the top channel trendline near 1.3500. Since then, the pair spiked through the 1.3850 level on October 13th, however it was met with sellers and pulled back to 1.3657.

USD/CAD is trading in the upper half of its recent range. First resistance is at the highs of October 13th near 1.3978. Horizontal resistance from the highs of May 2020 crosses just above there at 1.4008, and then the 161.8% Fibonacci extension from the October 13th highs to the October 18th lows near 1.4044. However, if resistance holds and the expectations increase for a 75bps rate hike next week, USD/CAD could move lower.

Release of the September CPI report increases the chances that the BOC will hike rates by 75bps next week. Over the last month, USD/CAD has been moving aggressively higher, above the top trendline of an upward sloping channel. One has to consider that the higher inflation rate and a possible rate hike of 75bps may be enough to push USD/CAD lower.

6:41 am

Economic News

October 19, 2022

The Contrarian Case for a EUR/USD Rally if Rates Can Break Above

It’s not particularly hard to make a bearish case for the European economy, especially relative to the US.

Between a war in it’s backyard, energy shortages, and an imminent economic recession, it would be hard for the outlook for the Eurozone to look much darker. The fact that the Eurozone’s headwinds are so apparent and well-known suggests that there’s at least a chance that they are already factored into the current market prices.

Meanwhile, traders are pricing in a terminal Fed Funds rate of nearly 5.0% for next year, and it would take a concerted chorus of hawkish comments from the Fed to raise that projection further in the near term. With the month’s major US data behind us, the market may shift its attention elsewhere over the next two weeks, potentially leading to consolidation or a correction in the greenback.

IF we do see a counter-trend rally in the world’s most widely-traded currency pair, the key area to watch will be in the 0.9950-1.0000 zone, where the top of the bearish channel, the declining 50-day EMA, and key psychological resistance at parity all converge. If we do see a break above that key resistance confluence, it would confirm a higher low and higher high on the daily chart for the first time in 18 months and point toward an extended bounce toward the mid-September highs near 1.0200 or even previous-support-turned -resistance in the 1.0350 area.

Of course, the more logical outcome is that the EUR/USD bounce peters out quickly, as previous bounces have consistently for the past 18 months, and the single currency continues its relentless march lower as we march toward November.

6:27 am

Economic News

October 18, 2022

NZ CPI Review: OCR Now Expected to Peak at 5%

It is expected that the official Cash Rate to reach a peak of 5% for this cycle and also a 75 basis point hike to 4.25% at the upcoming November Monetary Policy Statement, a step up from the 50 basis point increases in the last few reviews. Inflation in continuing to run red-hot across the economy, and core inflation is yet to show signs of easing despite the sharp rise in interest rates over the past year.

It is also seen that ongoing firmness in domestic economic conditions, including a drum tight labor market and resilience in household demand.

Today’s inflation figures were unexpectedly bad. Prices are not only rising quickly but across the board, which increasingly points to a common cause rather than special factors. And even though forecasters were braced for a strong number today, the result beat all expectations. Combine that with a sense that domestic demand is holding up in the face of the interest rate hikes that we’ve seen to date, and it looks like the Reserve Bank has more work to do yet.

The large rises in those specific areas, we’re seeing inflation running red-hot across the economy. The broad-based nature of inflation pressures was reflected in the suite of core inflation measures released by Stats NZ today, which smooth through the quarter-to-quarter swings in prices and track the underlying trend in inflation. Most core inflation measures are now running above 6%- well above the RBNZ’s 1-3% target band.

With resilient economic activity, the current strong inflation pressures are likely to be with us for some time yet. We’re also likely to see further increases in wage rates, which would reinforce the pressure on domestic prices. Against this backdrop, the RBNZ will need to take the cash rate much further into tight territory than they had previously anticipated.

6:56 am

Economic News

October 17, 2022

EUR/USD displays a rangebound structure around 0.9700 ahead of US Inflation

EUR/USD moved sideways along the 0.9700 horizon as markets waited for the release of US inflation data last week. October 14th the Department of Labor Statistics of the country published fresh values of the Consumer Price Index, which exceeded the forecast values. In monthly terms, the September CPI reached 0.6% against the forecast of 0.5%, in annual terms – 6.6% against the forecast of 6.5% and the previous value of 6.3%.

The dollar began to lose its position rapidly: DXY fell to 112.46, and EUR.USD broke through 0.9800. On the contrary, the S&P500 was positive by the end of Thursday and grew by 2.6%. Analysts cite the strong oversold stock market as the main reason for this change in sentiment and the sharp increase in risk appetites. It is believed that stocks lose about 30% during recessions. At this stage, the S&P500 is down 27.5% during 2022. Therefore, some investors have decided that the bottom has already been reached or will be reached soon, and it is time to start buying. A large number of put options have recently been bought in the US market, on which profit-taking took place, and the freed fiat was used to purchase risky assets.

Following the release of September US Retail Sales and the University of Michigan Consumer Sentiment Index, the EUR/USD pair was trading in the 0.9750 zone. October 14.55% of analysts support the fact that it will continue to move south in the near future, another 35% expect it to move north, and the remaining 10% vote for a sideways trend. Among the trend indicators on D1, 90% are red and 10% are green. The picture is quite different among the oscillators: only 40% of them advise selling the pair, 15% are in favor of buying, and 55% have taken a neutral position.

This week’s highlights will be Tuesday October 18th, when the German ZEW Economic sentiment index is released. The Consumer Price Index of the Eurozone will be known. And there will be data on manufacturing activity and the housing market in the US on Thursday, October 20th.

5:39 am

Economic News

October 15, 2022

Upcoming Market Updates: NZD, GBP, JPY, USD, CAD, EUR

NZD: Business NZ Manufacturing Index, it measures Level of a diffusion index based on surveyed purchasing managers in the services industry.

GBP: Rightmove HPI m/m, it measures Change in the asking price of homes for sale.

JPY: Revised Industrial Production m/m, it measures Change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

JPY: Tertiary Industry Activity m/m, it measures Change in the total value of services purchased by businesses.

USD: Empire State Manufacturing Index, it measures Level of a diffusion index based on surveyed manufacturers in New York state.

CAD: BOC Business Outlook Survey, it measures Survey of about 100 businesses which asks respondents to rate the relative level of general business conditions, such as sales growth, investment in machinery, employment, inflation expectations, and credit conditions.

EUR: German Buba President Nagel Speaks, ECB Governing Council members vote on where to set the Eurozone’s key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy.

CAD : Gov Council Member Rogers Speaks, BOC Governing Council members are responsible for setting the nation’s key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy.

6:29 am

Economic News

October 13, 2022

FOMC Minutes show Fed is serious about inflation

The September 21st FOMC meeting chose to hike the Fed Funds rate by 75bps for the third consecutive meeting to bring the key rate to 3%-3.25%. The Minutes from that meeting noted that the cost of doing too little outweighed the cost of doing too much. They also noted that the labor market would need to weaken to bring down high inflation. Some also said that after rates reach a sufficient level, they will need to hold this restrictive rate for some time.

After the Minutes were released, the CME Fed Watch Tool showed that markets were pricing in an 84% chance of a 75bps rate increase at the November 2nd meeting. However, this may change after the US CPI data is released tomorrow.

The USD index has been moving aggressively higher since the end of March as it became apparent that the Fed would be hiking rates at a faster pace than initially thought. The DXY traded in an orderly channel from 97.69 on March 31st to 114.79 on September 28th. It then pulled back to horizontal support just above the bottom trendline of the channel, near 110.05, and has been moving higher since. On Monday the DXY reached the 61.8% Fibonacci retracement from the highs of September 28th to the lows of October 4th near 112.97 and has been oscillating around that level.

IF the US Dollar Index breaks higher, the first resistance is at the September 28th highs of 114.79. Above there, price can move to the 161.8% Fibonacci extension from the highs of September 28th to the lows of October 4th near 116.04 and then horizontal resistance from March 2002 at 116.76. However, if the DXY breaks lower out of the triangle, first support is at the lows of October 11th at 112.41, then the lows of October 4th at 110.06. Below there, strong horizontal support dating to July 14th crosses at 109.29.

6:14 am

Economic News

October 12, 2022

AUD/USD falls to new 18-month low

AUD/USD continues to lose ground and can’t find its footing. The Aussie started the week on the wrong foot, with a decline of 1.0% on Monday. AUD/USD is trading at 0.6266 down 0.52%. Earlier the day, the Australian dollar fell to 0.6247, its lowest level since April 2020.

Australia has posted weak numbers this week, adding to the downward pressure on the ailing Australian dollar. The Services PMI fell into contraction territory with a reading of 48.0 in September, down from 53.3 in August, as the uncertain economic outlook is weighing on business activity. Business confidence levels are down, with NAB business confidence slowing to 5 in September, down from 10 in August. Westpac Consumer Sentiment indicated that consumers are also in a sour mood, with a reading of -0.9% in September after a gain of 3.9% in August, which was the sole gain over the past 11 months.

Risk has been increasing by the increase in crisis in the Ukraine war, with Russia annexing parts of occupied Ukraine and firing missiles at civilian targets. The energy crisis is looming over Western Europe, just weeks ahead of winter. This is weighing on the risk-sensitive Australian dollar.

In the US, inflation releases have taken on added significance, as the Federal Reserve has designated soaring inflation as public enemy number one. The US releases PPI data on Wednesday and CPI a day later. Headline inflation has dropped over the past two months, but remains at 8.3%. Unless headline and core inflation both surprise with much lower readings than expected, we don’t anticipate any change in course from the Fed. If inflation underperforms, the US dollar could lose ground. On the other hand, a higher-than-expected inflation report would be bullish for the US dollar.