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USD/CAD Holds Near One-Week Low

USD/CAD Dips Below 1.3650 Ahead of US/Canada PMI Data

USD/CAD Dips Below 1.3650 Ahead of US/Canada PMI Data

The USD/CAD currency pair displayed a slight downward trend in early Monday trading in the European session, hovering around 1.3625. This movement was primarily driven by a weakening US Dollar following the latest US Personal Consumption Expenditures (PCE) Price Index data. Market focus now shifts to the upcoming release of the Canadian S&P Global Manufacturing PMI and the US ISM Manufacturing PMI for May, both set to be disclosed later in the day.

In the US, inflation rates stabilized in April, fueling speculation that the Federal Reserve might lower interest rates later this year, which could further impact the dollar’s strength. The Commerce Department reported that the PCE rose by 0.3% month-over-month in April, consistent with March’s figures. The Core PCE, which excludes the more volatile prices of food and energy, saw a slight increase of 0.2% month-over-month in April, down from 0.3% in March. Year-over-year, the core PCE price index held steady at a 2.8% increase for the third consecutive month. Following the inflation report, market expectations for a Fed rate cut in September have increased, now standing at nearly 53%, up from 49%.

On the Canadian side, the economy showed signs of weakness with its first-quarter GDP growth figures. The GDP expanded by an annualized rate of 1.7%, which not only fell short of the anticipated 2.2% growth but also did not meet the central bank’s projection of 2.8%. This disappointing data prompted the Bank of Canada (BoC) to cut interest rates last Wednesday. Additionally, the Canadian Dollar is under pressure due to falling crude oil prices, a critical factor given Canada’s status as the largest oil exporter to the United States.

These economic indicators from both nations are crucial as they provide insights into the possible future directions of their respective central banks regarding interest rates. As investors and traders await the manufacturing PMI readings from Canada and the US, these figures will likely influence the currency pair further, shaping market dynamics for the near term.

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USD/CAD Nears 1.3700 Before US PCE, Canada GDP Data

USD/CAD Nears 1.3700 Before US PCE, Canada GDP Data

The USD/CAD pair is seeing a rebound, trading near 1.3690 during Friday’s Asian session, after halting its recent downtrend. This comes as the US Dollar strengthens in anticipation of the release of the Core Personal Consumption Expenditures (PCE) Price Index, a key inflation measure favored by the Federal Reserve, set to be announced later today.

In the US, the GDP growth for the first quarter was revised down to 1.3% from an initial estimate of 1.6%, leading investors to speculate on the possibility of a more dovish approach by the Federal Reserve. This revision has introduced some uncertainty regarding potential rate cuts in September. Furthermore, the US reported an increase in Initial Jobless Claims for the week ending May 2, with figures rising to 219,000 from 216,000 the previous week, surpassing the anticipated 218,000.

The lower yields on US Treasury bonds could potentially restrain the US Dollar’s gains. The US Dollar Index (DXY), which tracks the dollar against a basket of six major currencies, is currently trading higher at around 104.80. Specific yield rates show the 2-year and 10-year Treasury yields at 4.92% and 4.54%, respectively.

Conversely, in Canada, diminishing prospects of a rate cut by the Bank of Canada (BoC) in June are evident, influenced by fresh data highlighting sustained price pressures. April saw a significant jump in producer prices by 1.5%, following a 0.9% increase in March, almost double the forecasted 0.8%. The likelihood of a 25-basis point cut at the BoC’s next meeting has decreased to 34% from 46% just a week earlier.

On the data front, Statistics Canada is scheduled to release its GDP figures for the first quarter. Analysts expect an annualized growth rate of 2.2%, marking an improvement from the 1.0% expansion seen in the previous quarter.

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Oil Price Surge May Limit Gains

USD/CAD Rises to 1.3650 Amid Decline in Oil Prices

USD/CAD Rises to 1.3650 Amid Decline in Oil Prices

The USD/CAD pair has edged higher for the second consecutive day, trading around 1.3650 during Asian hours on Wednesday. This upward movement is driven primarily by a growing sense of risk aversion among investors, which is bolstering demand for the US Dollar (USD) and, in turn, supporting the USD/CAD pair.

On Tuesday, risk sentiment soured following comments from Neel Kashkari, President of the Federal Reserve Bank of Minneapolis. Kashkari indicated that a rate hike might still be on the table, suggesting uncertainty about the disinflationary process and predicting only two rate cuts. This hawkish stance has increased speculation about potential future rate hikes, contributing to the appreciation of US Treasury yields and strengthening the Greenback.

The US Dollar Index (DXY), which measures the USD against six major currencies, was trading higher around 104.70. Concurrently, the yields on 2-year and 10-year US Treasury bonds stood at 4.96% and 4.54%, respectively, further supporting the USD. Additionally, recent economic data showed that the US Housing Price Index (MoM) for March underperformed, coming in at 0.1% compared to 1.2% in February and below the expected 0.5%. Market participants are now looking forward to remarks from New York Fed President John Williams and the release of the Fed’s Beige Book, which will provide insights into the current US economic situation based on a variety of sources.

On the Canadian front, the Canadian Dollar (CAD) faced pressure due to a downward correction in crude oil prices. As Canada is a major oil exporter to the United States, fluctuations in oil prices significantly impact the commodity-linked CAD. Despite this, Canada’s Industrial Product Price Index showed a 1.5% month-over-month increase in April, surpassing market forecasts of 0.6% and reaching a new eight-month high. This follows an upwardly revised 0.9% increase in March. Additionally, the Raw Materials Price Index rose by 5.5% month-over-month in April, up from a previous rise of 4.3% and above the expected increase of 3.2%.

In summary, the USD/CAD pair’s recent gains are underpinned by a combination of risk aversion favoring the US Dollar, hawkish signals from the Federal Reserve, and robust US Treasury yields. Meanwhile, the Canadian Dollar’s performance is hindered by lower oil prices, despite stronger-than-expected domestic industrial and raw materials price data. Market participants will closely monitor upcoming economic reports and speeches for further cues on the pair’s direction.

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USD/CHF Gains Momentum Above 0.8550 Ahead of FOMC Minutes

USD/CHF Remains Strong Above 0.9150 Amid Middle East Tensions

USD/CHF Remains Strong Above 0.9150 Amid Middle East Tensions

During the early European trading hours on Monday, the USD/CHF pair demonstrated strength, trading near the 0.9150 mark. This positive momentum comes as investors anticipate the US Federal Reserve’s (Fed) potential interest rate cuts starting from their September meeting. The prevailing expectation of easing monetary policy in the US has lent some support to the US Dollar (USD), contributing to the uplift of the pair. Attention is now turning towards a forthcoming speech by Swiss National Bank’s (SNB) Chairman Thomas Jordan on Tuesday, which is eagerly awaited for new directives. This is particularly significant as it precedes the release of Switzerland’s Gross Domestic Product (GDP) data for the first quarter.

Fed officials have maintained a hawkish stance, suggesting that borrowing costs might stay elevated for a longer period than initially expected. This position is reinforced by consecutive inflation readings that continue to surpass the Fed’s 2% target, underlining persistent inflationary pressures.

Recent robust economic indicators from the US have also fueled speculation that the Fed might postpone its anticipated easing cycle. After the release of stronger-than-expected economic data last Friday, the financial markets adjusted their expectations, with the likelihood of a September rate cut by the Fed falling to 53% from the previous 64%, as per the CME FedWatch tool. Notably, the US Durable Goods Orders for April saw a rise of 0.7% month-over-month, surpassing the market’s forecast of a 0.8% decline, as reported by the US Census Bureau. Additionally, the University of Michigan Consumer Sentiment Index for May recorded a slight increase to 69.1 from 67.4 in April, beating the anticipated 67.5, suggesting a more resilient consumer outlook than expected.

On the geopolitical front, tensions in the Middle East have escalated following recent developments reported by CNN. At least 35 Palestinians were killed and dozens injured due to Israeli air strikes on a displacement camp in Rafah on Sunday, as stated by the Ministry of Health in Gaza. These unfolding events are closely monitored by market participants, as any increase in regional tensions could trigger safe-haven flows. Such flows typically benefit the Swiss Franc (CHF), which is considered a safe-haven currency, potentially exerting downward pressure on the USD/CHF pair.

Investors and traders alike will keep a keen eye on both economic and geopolitical developments, as these factors are likely to play crucial roles in influencing the currency pair’s movements in the near term.

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USD/CAD Dips Below 1.3650 Ahead of FOMC Minutes

USD/CAD Dips Below 1.3650 Ahead of FOMC Minutes

USD/CAD Dips Below 1.3650 Ahead of FOMC Minutes

The USD/CAD currency pair declined to 1.3640 as the U.S. Dollar experienced a period of consolidation during the early European session on Wednesday. Despite softer Canadian Consumer Price Index (CPI) inflation figures, which might suggest an upcoming interest rate cut by the Bank of Canada (BoC), the pair continued its downward trajectory. Market participants are now looking forward to the release of the Federal Open Market Committee (FOMC) Minutes and a speech by Federal Reserve Governor Austan Goolsbee later today, which could provide further insights into future monetary policies.

On Tuesday, Statistics Canada released data showing a deceleration in inflation for April, with the annual CPI growth rate cooling to 2.7%, down from 2.9% in March, aligning with market predictions. The month-over-month increase in CPI also moderated, rising by 0.5% in April compared to 0.6% in the prior month. Notably, the BoC’s core CPI, which excludes the volatile components of the full index, increased by only 1.6% year-over-year in April, a reduction from the 2% rise observed in March.

This slowdown in inflation has fueled speculation among traders that the BoC could initiate a rate cut as early as its next meeting in June. The probability of a rate cut on June 5 surged to nearly 55%, up significantly from 39% before the inflation data was released. This shift in expectations is largely due to the easing inflation, suggesting less pressure on the BoC to maintain higher interest rates.

The trajectory of interest rate adjustments by the BoC, coupled with anticipated actions from the U.S. Federal Reserve, could place downward pressure on the Canadian Dollar (CAD) and potentially support the USD/CAD pair moving forward. Fed officials have expressed a cautious approach to adjusting policy rates, indicating a preference to wait for more conclusive data that confirms a sustained movement towards the Fed’s 2% inflation target. Atlanta Fed President Raphael Bostic emphasized the need for prudence in making the first-rate move to avoid triggering instability in inflation rates. Similarly, Fed Governor Christopher Waller pointed out the necessity of observing several more months of favorable inflation data before considering a reduction in borrowing costs.

As the market awaits the FOMC Minutes and Fed speeches, the future movements of USD/CAD will likely hinge on indications of both central banks’ strategies concerning interest rate paths, especially in light of the current economic data. The forthcoming Fed communications could either validate the market’s current expectations or introduce new dynamics influencing the currency pair.

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GBP/USD Nears 1.2700 on 2024 Fed Rate Cut Hopes

GBP/USD Nears 1.2700 on 2024 Fed Rate Cut Hopes

GBP/USD Nears 1.2700 on 2024 Fed Rate Cut Hopes

The GBP/USD pair extended its gains for the second consecutive session, trading around 1.2710 during Asian hours on Monday. This upward movement was largely supported by a weaker US Dollar (USD). April data indicated that US consumer inflation had slowed to 0.3%, which has raised expectations for potential Federal Reserve (Fed) rate cuts in 2024. Despite this, the Fed remains cautious about inflation and the prospect of reducing rates next year.

According to the CME FedWatch Tool, the likelihood of the Federal Reserve implementing a 25 basis-point rate cut in September has slightly increased to 49.0%, up from 48.6% a week ago. This potential easing of monetary policy by the central bank could weaken the US Dollar and provide support to the GBP/USD pair.

On Friday, Federal Reserve Board of Governors member Michelle Bowman noted that progress on inflation might not be as steady as hoped. Bowman highlighted that the decline in inflation seen in the latter half of last year was temporary and that there has been no further significant progress on inflation this year. Additionally, Richmond Fed President Thomas Barkin mentioned that while inflation is easing, it will “take more time” to reach the Fed’s 2% target.

In the United Kingdom (UK), investors are anticipating a potential 60 basis points (bps) interest rate cut by the Bank of England (BoE) in 2024, with the first cut expected in August. The upcoming UK Consumer Price Index (CPI) data for April, scheduled for release on Wednesday, is forecasted to show an annual rise of 2.7%, according to FactSet estimates. This data is expected to have a significant impact on the Pound Sterling (GBP).BoE Governor Andrew Bailey, speaking after the release of March’s CPI data, remarked, “Inflation in the UK will fall near its 2% target next month,” noting that inflation has been declining roughly in line with the BoE’s February forecast.

Overall, the GBP/USD pair’s recent gains are driven by a combination of weaker USD and market expectations for rate cuts from both the Fed and BoE in the near future. However, the future movements of this currency pair will heavily depend on upcoming economic data releases and central bank policy decisions.

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USD/JPY Nears 156.00 Amid Unchanged BoJ Bond Purchases

USD/JPY Nears 156.00 Amid Unchanged BoJ Bond Purchases

USD/JPY Nears 156.00 Amid Unchanged BoJ Bond Purchases

During the Asian trading session on Friday, the USD/JPY pair climbed to a high of 155.90 as the Japanese Yen faced increased downward pressure. This market movement coincided with the Bank of Japan’s (BoJ) decision to maintain its current level of bond purchases, diverging from market expectations that had anticipated a possible reduction in debt buying earlier in the week.

Market participants are now closely watching the BoJ’s next steps, with speculation mounting that the central bank may opt to taper its bond-buying program at the upcoming June policy meeting. BoJ Governor Kazuo Ueda further solidified this perspective by clarifying in recent statements that the central bank has no immediate plans to offload its holdings of exchange-traded funds (ETFs).

Amidst these developments, Toshitaka Sekine, a former chief economist at the BoJ, shared insights in a Bloomberg interview that suggest the potential for more aggressive monetary policy adjustments. According to Sekine, the BoJ might increase its benchmark interest rate as many as three times before the year’s end. He pointed out that the next rate hike could come as soon as June, noting that there is considerable scope to modify the current “excessively” accommodative policy settings.

Meanwhile, the US Dollar has shown resilience as reflected in the US Dollar Index (DXY), which measures the strength of the USD against a basket of six major currencies. The index was observed trading around 104.60, having recovered from a multi-week trough of 104.08 on Thursday. This rebound comes amidst a backdrop of ongoing caution from the Federal Reserve regarding inflation dynamics and the potential timing of future rate cuts, possibly extending into 2024.

Key comments from Federal Reserve officials underscore the prevailing economic sentiment. Atlanta Fed President Raphael Bostic emphasized the necessity of patience with interest rates during a speech in Jacksonville, highlighting persistent pricing pressures within the U.S. economy. Similarly, Cleveland Fed President Loretta Mester remarked that it might take longer than previously expected to determine a clear inflation trajectory with confidence. These statements suggest a consensus among some Fed policymakers that the current restrictive monetary stance should be sustained longer to ensure inflation targets are met securely.

These intertwined dynamics between U.S. monetary policy and developments within the Bank of Japan are likely to keep investors on edge as they navigate through an environment filled with policy uncertainties and their implications for global currency markets.

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The Dow futures remained unchanged, but Zoom witnessed a notable 17.1% drop

The Dow futures remained unchanged, but Zoom witnessed a notable 17.1% drop

During Monday’s evening trading, U.S. stock futures experienced minimal movement, remaining within a narrow range, following moderate gains in major benchmark averages. Investors were focused on upcoming quarterly earnings reports scheduled for the week. By 7:15 pm ET (11:15 pm GMT), Dow Jones Futures, S&P 500 Futures, and Nasdaq 100 Futures were all trading flat.

In after-hours trading, ZoomInfo Technologies Inc (NASDAQ: ZI) saw a significant dip of 17.1% after reporting its Q2 earnings. The company’s earnings per share (EPS) came in at $0.26, slightly higher than the expected $0.23, while its revenues reached $308.6 million, slightly below the anticipated $310.94 million.

Similarly, Yum China Holdings Inc (NYSE: YUMC) experienced a decline of 2.8% following its Q2 earnings release. The company reported an EPS of $0.47, slightly surpassing the expected $0.46, but its revenues were $2.65 billion, falling short of the projected $2.72 billion.

Harmonic (NASDAQ: HLIT) also faced a significant drop of 13.7% after reporting Q2 earnings. The company’s EPS was $0.12, missing the expected $0.13, and its revenues were $156 million, lower than the expected $167.52 million.

In contrast, Arista Networks (NYSE: ANET) witnessed a substantial increase of 14% following its Q2 earnings announcement. The company reported an EPS of $1.58, surpassing the expected $1.44, and its revenues were $1.46 billion, higher than the expected $1.38 billion.

Looking ahead to Tuesday’s trading session, market participants will closely monitor the release of Markit and ISM manufacturing PMIs and JOLTs job openings data. Additionally, several prominent companies, including Pfizer Inc (NYSE: PFE), Advanced Micro Devices Inc (NASDAQ: AMD), Starbucks Corporation (NASDAQ: SBUX), and Uber Technologies Inc (NYSE: UBER), will be reporting their quarterly earnings.

During Monday’s regular trading hours, the Dow Jones Industrial Average increased by 100.2 points or 0.3% to reach 35,559.5. The S&P 500 also gained 6.7 points or 0.2%, reaching 4,589, and the NASDAQ Composite rose by 29.4 points or 0.2% to reach 14,346.

On the bond markets, the United States 10-Year rates were at 3.965%. Investors will keep a close eye on economic data and corporate earnings to gauge the market’s direction in the upcoming trading sessions.

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US Dollar Stabilizes After Recent Losses

U.S. Stocks Rise as Market Awaits Fed Decision

U.S. Stocks Rise as Market Awaits Fed Decision

On Tuesday, the U.S. stock market experienced a positive swing, with investors closely watching earnings reports and eagerly anticipating the outcome of the U.S. Federal Reserve’s interest rate decision.

The Dow Jones Industrial Average, one of the key indices in the stock market, ended the day with a marginal increase of 0.1 percent, settling at 35,437.93 points. This marked the twelfth straight day of gains for the index. Meanwhile, the broader S&P 500 Index rose by 0.3 percent to reach 4,567.54, and the tech-focused Nasdaq Composite Index saw an increase of 0.6 percent, closing at 14,144.56.

Several companies released their earnings reports, which resulted in a mixed response on Wall Street. Shares of General Electric, Sherwin-Williams, and 3M saw substantial increases following their respective earnings announcements. Conversely, despite raising its full-year guidance, General Motors experienced a drop in share value.

In other corporate news, shipping giant UPS saw its shares dip by 1.9 percent after it reached a tentative five-year contract agreement with the Teamsters union. The agreement helped avert a potentially devastating nationwide strike. However, despite avoiding a disruptive strike, Steve Sosnick from Interactive Brokers suggested that UPS’s costs would likely increase as a result of the agreement.

Investors also kept a close eye on Alphabet, Google’s parent company, and Microsoft, both due to release their earnings reports after the market closed. The anticipation surrounding these tech giants’ earnings reports added an extra layer of suspense to the day’s trading activities on Wall Street.

However, the main focus for investors remained the impending decision by the U.S. central bank on interest rates. The decision is due at the end of a two-day policy meeting on Wednesday. The central bank is widely expected to raise interest rates for the eleventh consecutive time. Market participants are keen to glean any signs of further increases beyond this.

According to Peter Cardillo of Spartan Capital, the market is already factoring in a hike of 25 basis points. He further speculated that there might be indications that the central bank is nearing the end of its monetary tightening cycle.

In global economic news, the International Monetary Fund (IMF) slightly upgraded its outlook for global growth this year on Tuesday. This provided a glimmer of hope amid the prevailing economic uncertainties.

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Optimism in Asian Stock Markets as Fed, ECB, and BoJ Meetings Loom; China’s Performance Lags Despite Stimulus Hopes

Optimism in Asian Stock Markets as Fed, ECB, and BoJ Meetings Loom; China’s Performance Lags Despite Stimulus Hopes

Asian stock markets experienced a mixed start to the week, with Japan’s Nikkei 225 emerging as the top performer, soaring by nearly 1.5% fueled by robust quarterly earnings from major automotive manufacturers. The overall Japanese market sentiment also received a boost from expectations that the Bank of Japan (BoJ) would maintain its ultra-dovish stance during the forthcoming two-day policy meeting set to conclude on Friday.

In contrast, Chinese stocks struggled to keep pace with their regional counterparts due to mounting concerns over a real estate sector debt crunch and fears of a slowdown in economic growth. The Hang Seng in Hong Kong experienced a significant drop of over 1%, ranking among the weakest performers on the first trading day of the week. However, there are hopes that China will implement additional stimulus measures to mitigate potential losses.

In line with these expectations, China’s National Development and Reform Commission (NDRC) revealed new measures aimed at encouraging and supporting private investments in specific infrastructure sectors. The NDRC also pledged to provide enhanced financial backing for private projects, although the exact details are yet to be disclosed. Despite these efforts, the market sentiment remained cautious and failed to see a substantial lift.

Investors across the region appeared to be exercising caution and adopting a wait-and-see approach ahead of key central bank events scheduled for the week. The Federal Reserve (Fed) is set to announce its monetary policy decision on Wednesday following a two-day meeting, and a 25 basis points interest rate hike is widely anticipated. However, there are doubts among market participants regarding the extent of the Fed’s commitment to a more dovish policy stance.

Attention will be closely focused on the accompanying policy statement and the post-meeting press conference, where Fed Chair Jerome Powell’s remarks could provide valuable insights into the central bank’s future plans. Subsequently, the European Central Bank (ECB) meeting on Thursday and the Bank of Japan’s (BoJ) policy update on Friday will be key events to watch.

Meanwhile, traders on Monday were keenly awaiting the release of flash PMI prints from the Euro Zone, the UK, and the US, hoping for valuable cues to drive market momentum.

Overall, the Asian stock markets are facing a delicate balancing act, with some countries experiencing positive economic indicators and strong corporate earnings, while others grapple with uncertainties and the need for further stimulus measures. Investors are treading cautiously, recognizing the potential impact that central bank decisions and economic data releases can have on the regional and global financial landscape. As the week unfolds, market participants will closely analyze every development to make informed decisions in this dynamic and ever-changing market environment.

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GBP/USD Drops Below 1.2500 on Dovish BoE Outlook and Trump Tariff Moves

Asian markets mixed as Japan reports weak trade data

Asian markets mixed as Japan reports weak trade data

Asian markets exhibited a varied performance in response to Japan’s disclosure of disappointing trade data for June. The revelation of a nearly 13% decline in imports from the previous year resulted in an unexpected trade surplus for Japan, primarily attributed to the reduction in oil prices. This news had a mixed impact across Asian markets, with share prices rising in Sydney and Hong Kong, but declining in Shanghai, Tokyo, and Seoul. In addition, U.S. futures experienced a slight dip, while oil prices remained relatively stable.

While Asian markets showed divergence, Wall Street continued its bullish trend as positive profit reports from major U.S. companies bolstered investor confidence. However, gains on the Nasdaq were somewhat tempered due to weaker-than-anticipated results from streaming giant Netflix and electric vehicle manufacturer Tesla, triggering caution among Asian investors.

In the U.S., the S&P 500 rose by 0.2%, reaching its highest level in over 15 months, while the Dow Jones Industrial Average saw a gain of 0.3%. One of the standout performers was Elevance Health, which reported robust profits and revenue for the spring, surpassing analysts’ expectations. Similarly, U.S. Bancorp, M&T Bank, and Goldman Sachs posted positive results, contributing to the overall market upswing.

In the commodities market, wheat prices experienced a sharp surge following Russia’s attacks on critical port infrastructure in Ukraine, resulting in the destruction of 60,000 tons of grain. The sudden spike in wheat prices was driven by concerns over potential disruptions to grain exports from Ukraine, raising global food security apprehensions.

As the earnings reporting season gains momentum, analysts are projecting a third consecutive quarter of weaker earnings per share for S&P 500 companies. However, the relatively low expectations provide companies with an opportunity to outperform and surprise the market positively.

In the currency market, the U.S. dollar depreciated slightly against the Japanese yen, while the euro displayed a marginal increase against the dollar. These currency movements reflect ongoing fluctuations in foreign exchange markets, influenced by various economic indicators and geopolitical developments.

Amidst these market dynamics, investors remain vigilant of further trade data releases and earnings reports, which have the potential to significantly influence market sentiment and impact future performance in the Asian markets. Market participants will carefully assess economic indicators and corporate results to gain insights into the trajectory of the global economy and the investment landscape. As uncertainties persist in the aftermath of the pandemic and geopolitical tensions, investors seek to navigate an ever-changing and complex market environment, making informed decisions to manage risks and identify potential opportunities.

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Asian Stock Traders Tread Cautiously Ahead of US Retail Sales Data

Asian Stock Traders Tread Cautiously Ahead of US Retail Sales Data

As Tuesday unfolded, Asian stock traders navigated the markets with caution, displaying a predominantly negative sentiment across the region. One prevailing concern on their minds was China’s economic outlook, which cast shadows of uncertainty on the trading floors. Adding to their apprehension was the imminent release of crucial U.S. data, especially the highly anticipated Retail Sales and Industrial Production figures for June. The impending data release fueled a sense of cautious anticipation, as the market eagerly awaited insights into the health of the world’s largest economy and its potential implications for global markets.

Despite the prevailing market sentiment, Japanese traders managed to defy the regional trend, with their return from a holiday marking a slight upswing in the NIKKEI index, which gained 0.23%. However, other parts of Asia did not share in this mild success. Hong Kong’s Hang Seng index experienced a significant decline of 1.85%, while China’s Shanghai Composite Index slipped marginally by 0.06%. South Korea’s KOSPI index also followed the downward trend, losing 0.5%, further adding to the cautious atmosphere.

Interestingly, amid the cautious sentiment, the Bank of Japan (BoJ) took a counterintuitive stance by maintaining its easy-money policy. This decision surprised many, as market participants had anticipated a potential departure from ultra-low interest rates and a toning down of its Yield Curve Control (YCC) policy. However, the BoJ’s steadfastness underscored its commitment to supporting the Japanese economy amid the prevailing global economic challenges.

Geopolitical developments also grabbed the attention of investors. U.S. Climate Envoy John Kerry’s optimistic remarks about future cooperation with China during a dialogue with China’s top diplomat, Wang Yi, were closely monitored. Any shifts in U.S.-China relations could significantly influence market dynamics and risk sentiment, making this a crucial factor for traders to watch closely in the days ahead.

Additionally, the latest economic indicators from China added to the market’s unease. The disclosure of an annual GDP growth rate of 6.3% fell short of the projected 7.3% and was lower than the previous figure of 4.5%. Despite this, year-on-year Industrial Production showed a more positive side, rising to 4.4% from the previous 3.5%, surpassing the consensus estimate of 2.7%. These mixed economic signals from China further contributed to the cautious mood on the trading floors.

As the trading week progressed, market players eagerly awaited upcoming data releases that could influence the market’s direction. Among these are Japan’s Trade Balance and National Core CPI YoY, which may provide insights into the health of the Japanese economy. However, the most significant event on their radar was the release of U.S. Retail Sales data for June, expected to increase by 0.5% compared to the previous month’s 0.3%. This data release could have substantial implications for USD dynamics and possibly hint at the trajectory of the ongoing rate hike cycle. Consequently, traders kept a close eye on the performance of assets like Gold, equities, and AUDUSD, which could be significantly influenced by these developments in the global financial markets.

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Market Optimism Rises as Asian Shares Rally and Dollar Slumps on Fed’s Potential End to Rate Hikes

Market Optimism Rises as Asian Shares Rally and Dollar Slumps on Fed’s Potential End to Rate Hikes

On Thursday, Asian shares and bonds enjoyed a rally, while the dollar faced significant losses. This shift in the market sentiment was fueled by lower-than-expected U.S. inflation figures, leading to the belief that the Federal Reserve may be nearing the end of its tightening cycle post-pandemic. In contrast, European stocks had a cautious start, with EUROSTOXX 50 futures holding steady, while S&P 500 and Nasdaq futures showed minimal movement.

Despite China reporting disappointing trade data, indicating a higher-than-anticipated decline in both exports and imports last month, Asian investors maintained their optimism. They wagered that this setback would prompt further stimulus measures. The MSCI’s broadest index of Asia-Pacific shares outside Japan surged by 1.8%, with Hong Kong’s Hang Seng index soaring 2.6% and Australia’s resource-heavy shares gaining 1.7%. Japan’s Nikkei also experienced a rise of 1.5%.

Chinese tech giants listed in Hong Kong witnessed a 3.5% rally after Premier Li Qiang encouraged their support in bolstering the slowing economy. This move adds to indications that the sector’s years-long crackdown has come to an end.

The latest U.S. consumer inflation report delivered more positive news than expected. The Consumer Price Index (CPI) showed a year-on-year increase of 3% in June, falling slightly short of the anticipated 3.1% gain. This figure is significantly lower than last year’s 9.1% for the same period. Furthermore, core inflation, which had concerned the Fed, displayed a sharper deceleration than anticipated.

However, futures still suggest a 94% probability of a quarter-point hike from the Fed later this month. Yet, the likelihood of an additional hike in September has decreased to 13.2%, down from the previous day’s 22.3%. Futures now indicate an earlier first rate cut in March next year and anticipate a total of 125 basis points in cuts by 2024.

Following last week’s sell-off, bonds rebounded, resulting in a decline in global yields. The U.S. dollar reached a new 15-month low, easing pressure on emerging market currencies and granting Asian policymakers greater flexibility to implement monetary policy adjustments.

Meanwhile, the euro reached a new 15-month high, and the Japanese yen strengthened against the dollar. Oil prices remained close to two-month highs, and gold prices remained stable.

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European Stock Futures Show Slight Increase; U.S. CPI Identified as Crucial Factor

European Stock Futures Show Slight Increase; U.S. CPI Identified as Crucial Factor

A slight uptick in European stock futures has been observed, with the U.S. Consumer Price Index (CPI) report playing a crucial role in the trend. As of 02:00 ET (06:00 GMT), Germany’s DAX futures contract traded 0.4% higher, while France’s CAC 40 futures saw an increase of 0.4%. The FTSE 100 futures contract in the U.K., however, remained largely unchanged.

The positivity is believed to stem from the strong close on Wall Street, where the Dow Jones Industrial Average gained over 300 points, or 0.9%. Investors are hopeful that the upcoming U.S. inflation report for June may influence the Federal Reserve to conclude its interest rate hikes earlier than anticipated.

Federal policymakers are expected to raise interest rates during their next meeting later this month, following a pause last month. However, investors are keenly awaiting the monthly consumer inflation report for insights into potential additional hikes. The headline annual figure for June is projected to have risen by 3.1%, down from May’s 4% rise. Meanwhile, the core rate is predicted to have dropped for a third consecutive month to 5%, from 5.3%.

Concerns about aggressive measures to curb inflation potentially leading to a recession in the world’s largest economy have been a significant factor impacting global markets.

In Europe, German inflation rose 6.4% annually in June, halting a steady decline since the beginning of the year. In contrast, Spanish inflation is expected to rise 1.9% year-on-year in June, falling short of the European Central Bank’s 2% target. This suggests that the central bank should contemplate concluding its rate-hiking cycle.

Oil prices have stabilized due to predictions of increased demand offsetting rising U.S. crude stockpiles. Major oil producers, including Saudi Arabia and Russia, have announced additional output cuts for August. A weakening U.S. dollar, which is suspected to be a result of the Federal Reserve nearing the end of its rate-hiking cycle, supports the oil market.

However, data from the American Petroleum Institute showed an unexpected growth of over 2 million barrels in U.S. crude stockpiles in the week leading up to July 7. Official numbers from the Energy Information Administration are yet to be released.

Gold futures rose 0.4% to $1,944.60/oz, and the EUR/USD exchange rate increased slightly, trading 0.2% higher at 1.1031.

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Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold (XAU/USD) dipped to a one-and-a-half-week low near $3,284 during the Asian trading session on Wednesday, weighed down by a stronger US Dollar and rising Treasury yields. Investors are increasingly convinced that recent US tariff hikes may fuel inflation, prompting the Federal Reserve to keep interest rates elevated for longer. 

The firmer Greenback, bolstered by expectations of prolonged Fed tightening and a robust June jobs report, has dulled the appeal of non-yielding assets like gold. Benchmark 10-year US bond yields also climbed, adding further pressure on the precious metal. 

Market participants remain cautious amid ongoing concerns about the economic fallout from Donald Trump’s aggressive tariff proposals. On Tuesday, the former US President threatened to impose duties of up to 50% on copper and 200% on foreign pharmaceuticals, unsettling global markets. However, gold’s traditional safe-haven demand has yet to see significant support in response. 

Traders are now eyeing the release of the FOMC meeting minutes later today, hoping for clues on the Fed’s rate path. Although a July rate cut appears off the table, markets are still pricing in up to 50 basis points of easing by year-end, likely beginning in October. 

Technically, a break below the $3,300 level, coupled with resistance at the 100-period SMA on the 4-hour chart, signals further downside. Momentum indicators suggest gold could slide towards the next support at $3,270, with a deeper drop towards $3,248–$3,247 not ruled out. 

On the upside, recovery attempts may face initial resistance near $3,310 and stronger barriers around $3,326 and $3,340. A decisive move above $3,360 could open the door to a short-term rebound toward the $3,400 mark. 

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Gold Price Climbs Steadily

Gold Price Climbs Steadily, Eyes Record High Amid Trade War Concerns

Gold (XAU/USD) extends its intraday rally, reaching the $2,880 region during the Asian session on Monday. The gains come in response to US President Donald Trump’s plan to impose new 25% tariffs on all steel and aluminum imports, reigniting fears of a global trade war and driving demand for the safe-haven precious metal. Additionally, concerns that Trump’s protectionist policies could fuel inflation further bolster gold’s appeal as a hedge against rising prices.

Gold Supported by Trade War Fears, But Fed Policy Remains a Concern

Despite strong upside momentum, gold’s gains may face limitations due to the resilient US Dollar (USD) and expectations that the Federal Reserve (Fed) might delay further rate cuts. The strong US employment data released on Friday, coupled with inflationary concerns, has reinforced speculation that the Fed will maintain a cautious stance.

Overbought conditions on the daily chart could also deter traders from initiating fresh bullish positions, especially in the absence of key US economic data early in the week.

Trump’s Tariff Announcement Sparks Market Uncertainty

On Sunday, Trump reaffirmed plans to impose 25% tariffs on all steel and aluminum imports into the US, adding that his administration would match tariff rates imposed by other countries. These announcements have further fueled uncertainty and strengthened gold’s safe-haven appeal.

Meanwhile, geopolitical tensions remain elevated. Russian Deputy Foreign Minister Galuzin stated there are no satisfactory proposals for Ukraine peace talks, dismissing Western statements as mere rhetoric. US Vice President JD Vance is reportedly heading to Germany this week to outline US policy proposals.

Fed Policymakers Express Caution Amid Economic Uncertainty

The latest US Nonfarm Payrolls (NFP) report showed 143K jobs were added in January, falling short of the 170K estimate but offset by an unexpected dip in the Unemployment Rate to 4.0%. While the report provides mixed signals, it has reinforced the belief that the Fed will remain cautious regarding further monetary easing.

Several Fed officials have weighed in on economic policy:

  • Minneapolis Fed President Neel Kashkari stated he would consider supporting further rate cuts if inflation data remains favorable and the labor market stays strong.
  • Chicago Fed President Austan Goolsbee noted that inconsistent US government policies create economic uncertainty, making it difficult to assess inflation trends.
  • Fed Governor Adriana Kugler acknowledged steady US economic growth but warned that progress toward the 2% inflation target remains uneven and slow.

What’s Next for Gold?

A stronger US Dollar could act as a headwind for gold prices, limiting aggressive bullish momentum. Traders will closely monitor Fed Chair Jerome Powell’s semi-annual congressional testimony and the upcoming US consumer inflation figures for further market direction.

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Gold Price Rally Holds Strong, But Overbought Conditions Raise Caution

Gold Price Bulls Hold Firm, But Overbought Conditions Suggest Caution

Gold (XAU/USD) continues its upward trajectory through the Asian session on Wednesday, reaching a fresh all-time high near $2,858. Concerns about the economic impact of US President Donald Trump’s trade tariffs continue to drive demand for the safe-haven metal. Furthermore, predictions that the Federal Reserve (Fed) would continue its easing cycle, backed by signs of deteriorating momentum in the US labor market, are fuelling demand for the non-yielding yellow metal.

 

Meanwhile, the US dollar (USD) remains under pressure near its weekly low, with rising expectations of further Fed policy easing, offering an extra lift to gold prices. However, Trump’s decision to suspend tariffs on Canada and Mexico has contributed to a risk-on mentality, which may restrict future gains for XAU/USD. Furthermore, gold is entering overbought territory on the daily chart, implying a short-term consolidation or minor retreat before the advance begins. Traders are now waiting for significant U.S. data releases, such as the ADP private-sector employment report and the ISM Services PMI, for new market signals.

Gold Bulls Retain Control Amid US-China Trade Tensions

Despite the positive risk tone, a further escalation in U.S.-China trade tensions continues to lend support to the upward momentum in gold. In response to President Trump’s latest tariffs, China has imposed targeted duties on US imports, and the threat of a trade war between the world’s two biggest economies has seen gold reach an all-time high on Wednesday.

On the macroeconomic front, the Job Openings and Labor Turnover Survey (JOLTS) released Tuesday revealed a decline in U.S. job openings, dropping to 7.6 million in December from a previous 8.09 million. The data signals a cooling labor market, increasing the likelihood of additional Fed rate cuts. This has kept USD bulls on the defensive and further strengthened XAU/USD.

Trump’s decision to postpone the application of a 25% tax on Canadian and Mexican imports by 30 days has revived hopes that a global trade war can be avoided. However, this has done little to undermine the positive enthusiasm toward gold.

Market players will be keenly monitoring Wednesday’s U.S. economic data, such as the ISM Services PMI and the ADP employment report, which may cause short-term changes in gold prices. However, Friday’s highly anticipated Nonfarm Payrolls (NFP) report continues to be the main focus. Furthermore, any fresh information about trade tariffs is probably going to cause financial markets to become more volatile.

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WTI Crude Oil Struggles Near $72.00, 100-Day SMA Holds as Key Support

WTI Crude Oil Struggles Near $72.00, 100-Day SMA Holds as Key Support

West Texas Intermediate (WTI) crude oil prices fell from a one-week high on Tuesday, attracting sellers for the second straight session. The commodity trades at $72.00, barely above last week’s one-month low and close to the important 100-day Simple Moving Average (SMA) support. 

US Tariff Delay Weighs on Oil Prices

US President Donald Trump has announced a one-month suspension on newly imposed tariffs on imports from Canada and Mexico, easing worries about potential supply disruptions from two of the country’s main oil suppliers. This development put downward pressure on crude oil prices. Furthermore, fears of lower gasoline demand—driven by the larger economic impact of Trump’s trade policies—are contributing to gloomy sentiment in the oil market.

OPEC+ Stands Firm on Production Policy

Despite Trump’s calls for higher output to combat rising oil prices, the Organization of Petroleum Exporting Countries and its allies (OPEC+) have chosen to keep current production levels. This decision may give some support for crude oil prices, avoiding further losses in the near term.

Key Technical Levels to Watch

Traders will closely monitor the 100-day SMA, currently positioned near the $71.00 mark, which serves as a crucial support level. A decisive break below this threshold could trigger an extended pullback from the recent multi-month highs. Conversely, a bounce from this level may reinforce buying interest and help WTI recover from its recent slump.

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Gold Holds Below $2,800 Despite Intraday Recovery

Gold Price Trims Intraday Losses but Remains Below $2,800 Amid Stronger USD

The gold price (XAU/USD) recovers some of its losses following the strong Asian session sell-off but remains in negative territory, hovering around $2,785, down about 0.60% for the day. The recent rise in the US Dollar (USD), fueled by President Donald Trump’s decision to impose tariffs on Canada, Mexico, and China, has pushed the greenback closer to a two-year high, weighing on gold and dragging it away from its all-time high of $2,817, hit on Friday.

However, projections that the Federal Reserve (Fed) would lower interest rates twice by the end of 2025, combined with indications about probable economic disruptions from Trump’s trade policies, contribute to gold’s safe-haven appeal. The current risk-off mentality further shields the downside, so bearish traders should exercise caution ahead of this week’s key US macroeconomic data, which begins with today’s ISM Manufacturing PMI release.

Technical Outlook: Gold’s Uptrend Intact Despite Intraday Pullback

From a technical perspective, the intraday decline found support near the $2,772 resistance-turned-support level, which now serves as a pivotal point. A decisive break below this zone could trigger further selling pressure, exposing gold to the next key support levels:

 

  • $2,755 – Initial downside target
  • $2,740 – Intermediate support
  • $2,725-$2,720 – Strong demand zone
  • $2,700 – Psychological level, a break below which could accelerate losses

Conversely, immediate resistance is seen in the $2,790-$2,800 region, followed by the record high of $2,817. Notably, momentum indicators on the daily chart remain comfortably positive, indicating that gold has not yet reached overbought levels. This provides room for additional upward momentum, confirming the broader bullish trend that began with the December swing bottom.

If gold manages to sustain a move above $2,817, it could pave the way for fresh record highs, with bulls eyeing further gains amid ongoing market uncertainty.

Market Drivers to Watch

US Dollar Strength: The impact of Trump’s tariffs on global trade could continue supporting the USD, potentially weighing on gold.

Federal Reserve Policy: Expectations of rate cuts in 2025 remain a crucial factor for gold’s long-term trajectory.

US Economic Data: The upcoming ISM Manufacturing PMI and Nonfarm Payrolls (NFP) report later this week could trigger volatility in gold prices.

Risk Sentiment: Any escalation in geopolitical or economic tensions could further boost gold’s safe-haven demand.

Overall, while gold has retreated from its highs, the larger bullish trend remains intact, with technical signals suggesting further upward movement as long as critical support levels hold.

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WTI Slips to $71.00 Amid Trade Tariff Concerns and Weak China Data

WTI Slips to $71.00 Amid Trade Tariff Concerns and Weak China Data

West Texas Intermediate (WTI) crude oil prices edge lower during Wednesday’s Asian session, erasing part of the previous day’s modest recovery from a nearly three-week low. The commodity trades near $71.00, down over 0.25% for the day, and remains vulnerable to further losses amid prevailing bearish sentiment.

Investor concerns persist over US President Donald Trump’s threat to impose trade tariffs on Canada, China, and Mexico by February 1, which could weigh on global fuel demand. Additionally, weak Chinese economic data adds to downward pressure. Official PMIs released on Monday highlighted continued weakness in the world’s second-largest economy and top crude importer, raising concerns over lower consumption.

Further pressure on oil prices comes from Trump’s energy policies, which include plans to ramp up US energy production and calls for the Organization of Petroleum Exporting Countries (OPEC) to increase output to drive prices lower.

With bearish fundamentals dominating, WTI remains susceptible to further downside risks in the near term.

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WTI Drops Toward

WTI Drops Toward $74.00 as Trump Pressures OPEC to Lower Oil Prices

West Texas Intermediate (WTI), the US crude oil benchmark, trades near $74.10 on Friday, continuing its downward trend after US President Donald Trump urged Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) to reduce oil prices.

Uncertainty surrounding Trump’s proposed tariffs and energy policies adds to the pressure on WTI. Speaking at the World Economic Forum in Davos on Thursday, Trump announced plans to request Saudi Arabia and OPEC to lower oil prices, saying, “I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil.”

Expectations of increased US production under Trump’s administration further weigh on oil prices. Earlier this week, Trump declared a national energy emergency, leveraging his authority to expedite the approval of oil, gas, and electricity projects that would typically require years of permitting.

Meanwhile, US crude inventories declined for the ninth consecutive week. The US Energy Information Administration (EIA) reported a drop of 1.017 million barrels in crude oil stockpiles for the week ending January 17, following a 1.962 million-barrel decline in the prior week. Market expectations had forecast a larger decrease of 2.1 million barrels.

Oil traders will closely monitor developments surrounding Trump’s energy policies and tariff announcements. Additionally, attention will shift to the preliminary US S&P Global Purchasing Managers Index (PMI) for January, set for release later on Friday. A weaker-than-expected reading could pressure the US Dollar (USD), potentially offering some support to the USD-denominated WTI price.

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Japan's Land Prices Rise at Fastest Pace Since

Japan’s Land Prices Rise at Fastest Pace Since 2010, Tax Agency Reports

Japan’s Land Prices Rise at Fastest Pace Since 2010, Tax Agency Reports

In 2023, Japan’s land prices experienced their fastest rise since comparable data became available in 2010, as reported by the National Tax Agency on Monday. This increase highlights a robust recovery, driven in part by a resurgence in tourism following the coronavirus pandemic.

Average land prices climbed by 2.3% last year, marking the third consecutive year of growth. This follows a 1.5% increase in 2022 and a 0.5% rise in 2021. The survey showed that land prices increased in 29 out of 47 prefectures, including Tokyo, Hokkaido, and Okinawa. This was an improvement from the previous year when prices rose in 25 prefectures. Conversely, land prices fell in 16 prefectures, down from 20 in 2022.

The demand for both residential and commercial land remained strong, with Fukuoka prefecture experiencing the highest increase at 5.8%. This surge was supported by redevelopment projects that boosted office demand and a revival in tourism that enhanced the demand for hotels and restaurants.

In Tokyo, the return of foreign visitors helped maintain a plot in the upscale Ginza shopping area as the most expensive location in Japan for the 39th consecutive year. The price of this plot increased by 3.6% in 2023, reaching 44.2 million yen ($274,705) per square meter, marking two consecutive years of price growth.

The surge in inbound tourism also played a significant role in this trend. Japan saw over 3 million visitors for the third straight month in May, benefiting from a weak yen that made travel more attractive. In 2022, Japan welcomed approximately 25 million foreign visitors, a notable recovery compared to the record 31.9 million in 2019.

The National Tax Agency evaluates land prices as of January 1 each year to determine inheritance and gift taxes on properties acquired during that year. This annual assessment is crucial for understanding the dynamics of the real estate market and its impact on taxation policies.

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Debate Highlights: Biden Struggles Against Trump on Economy

Debate Highlights: Biden Struggles Against Trump on Economy

During the recent presidential debate, President Joe Biden struggled to demonstrate his readiness for a second term, faltering against former President Donald Trump. The debate was controlled and policy-focused, contrasting the 2020 debates’ outbursts and testy exchanges.

Biden’s performance raised concerns about his age and mental acuity, with his hoarse voice, halting responses, and confusion over key data points. Even his prepared closing remarks were marred by stumbles and incoherence. In contrast, Trump appeared confident and robust. Biden’s allies attributed his performance to a cold, attempting to downplay its impact.

Trump maintained a mostly calm demeanor, avoiding the outbursts that previously hurt him and refraining from giving Democrats ammunition to label him as extreme. Although he still used his characteristic exaggerations and superlatives, his behavior was notably restrained compared to past debates.

Biden defended his economic record, highlighting efforts to help Black families with unemployment, housing discrimination, and student loans. However, he acknowledged ongoing inflation issues, which polls indicate are driving Black voters toward Trump—a critical demographic for Biden’s 2020 victory.

The candidates blamed each other for potential economic hardships if elected. Trump claimed Biden would raise taxes on families, while Biden warned that Trump’s tariff plans would increase costs for households. Biden has pledged not to raise taxes on those earning less than $400,000, while Trump proposes a 10% tariff on all goods, potentially costing households $1,700 annually according to the Peterson Institute for International Economics.

On abortion, Trump presented a moderate stance, taking credit for overturning Roe v. Wade but stating he would not ban the abortion drug mifepristone and supported exceptions for rape, incest, and the life of the mother. He accused Democrats of supporting late-term abortions and infanticide, which Biden firmly denied, stating, “We are not for late-term abortion period. Period. Period.”

The debate also saw Trump accuse China of exacerbating the US opioid crisis and bringing the country closer to a global conflict. He warned that China would dominate the US if current policies continued. Following the debate, the dollar inched higher in Asian trading as markets assessed Trump as having the upper hand.

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Yen Set for Major Swings Amid Intervention Threat, Charts Indicate

Yen Set for Major Swings Amid Intervention Threat, Charts Indicate

The market is bracing for a significant increase in yen volatility as the currency slumps to its lowest level since 1986, raising concerns about potential Japanese intervention. Volatility spreads reveal that investors are demanding a premium to guard against sudden moves, bearish yen bets are accumulating, and active trader positioning is at its most negative since 2022.

Despite warnings from Japanese authorities, the yen continues to weaken, increasing the likelihood of market intervention. Japan’s top currency official, Masato Kanda, has stated that the nation is prepared to intervene 24 hours a day if necessary.

Three key charts highlight the pressure on the yen. First, while implied volatility in the yen seems subdued, its spread over fluctuations in other currencies remains above the average since early 2021. This indicates heightened concern among investors about sudden movements in the yen compared to other major currencies.

Second, hedge funds and asset managers held bearish yen positions worth approximately $14 billion as of June 18, according to the latest Commodity Futures Trading Commission data. This figure surpasses bearish bets on other major currencies and contrasts with euro net longs worth $32.7 billion. The large bearish positions reflect a strong consensus against the yen among institutional investors.

Third, a Citigroup gauge of active trader positioning in the yen has dropped to its most negative level since 2022, following a surge in short bets. This indicates that traders remain firmly bearish on the yen but also suggests that many positions may need to be quickly unwound if the currency suddenly strengthens, potentially leading to rapid market movements.

The impact of the ¥9.8 trillion ($62 billion) Japan spent on foreign exchange intervention earlier this year has already diminished. Individual investors are now anticipating another opportunity to sell the yen if the currency appreciates following a new round of intervention. This sentiment was echoed by Hideki Shibata, a senior strategist at Tokai Tokyo Intelligence Lab, who noted that the market is closely watching for any signs of intervention that could trigger significant trading activity.

In summary, the yen is poised for substantial volatility, driven by persistent weakness and the looming threat of intervention. Investors are preparing for potential sharp movements, reflecting heightened uncertainty and strategic positioning in the currency markets.

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Economists Boost China Growth Forecasts

Economists Boost China Growth Forecasts Amid Improved Exports

Economists Boost China Growth Forecasts Amid Improved Exports

The outlook for China’s exports is expected to improve, supporting growth in the world’s second-largest economy even as consumer spending slows, according to a Bloomberg survey of economists.

Exports are forecasted to rise by 4.3% this year, up from a 2.8% gain predicted in May, based on the median forecast of 22 economists surveyed between June 17-24. China’s economy is projected to expand by 5%, an increase from the 4.9% forecasted in May, according to the median of 68 estimates.

China’s exports exceeded expectations in April and May, driven by strong overseas demand and the competitiveness of Chinese producers. This aligns with Beijing’s strategy of relying on exports to fuel growth and offset weak domestic spending. However, risks are increasing as Chinese companies face more trade barriers from the US and Europe.

These survey results contrast with a recent report from Goldman Sachs, which noted skepticism among its clients in China about the sustainability of export growth in the coming quarters. Investors are concerned about the sustainability of supply-side expansion amid weak domestic demand and rising trade frictions.

Economists have reduced their expectations for retail sales growth and consumer and factory-gate price inflation this year, reflecting pessimism over demand as the housing market continues to contract. Recent macroeconomic data indicate that the property sector remains a significant drag on the economy. Growth is still supported by stronger export momentum, but external risks are rising as China’s overcapacity leads to trade disputes, particularly with the US and Europe.

Deflationary pressures are likely to persist in China this year, with economists becoming more pessimistic about prospects. They expect the consumer price index to rise by only 0.6% this year, while the producer price index is forecasted to drop by 1%, both weakening from the estimates in May. This reflects consumers’ reluctance to spend amid concerns about job security, income prospects, and falling property values.

Economists have postponed their expectations for a cut to the reserve requirement ratio to the third quarter from the second quarter. The People’s Bank of China (PBOC) has held off on easing in recent months to protect the yuan and due to ample market liquidity. They also project slower money supply growth this year compared to May, as the central bank focuses on the efficiency of funds rather than pure expansion.

Projections for policy interest rates and the loan prime rate cuts remain set for the third quarter.

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Chinese Economy Poised for Growth Despite Challenges

Chinese Economy Poised for Growth Despite Challenges

Chinese Economy Poised for Growth Despite Challenges

China’s economy is set to continue its growth trajectory this year, bolstered by significant untapped potential in rural consumption, manufacturing, and further economic liberalization, as reported by the World Economic Forum.

Chen Liming, chair of Greater China at the WEF, highlighted China’s enduring strengths such as its vast market size, rich talent pool, and robust, complete industrial chain. These factors contribute to the nation’s long-term positive economic outlook.

China’s consumer market remains large, with substantial growth opportunities in regional and rural development. The country’s production and manufacturing systems are also undergoing continuous upgrades, driving further economic expansion.

According to data from the National Bureau of Statistics, China’s retail sales, a crucial indicator of consumer spending, increased by 3.7 percent year-on-year in May, and industrial output saw a 5.6 percent rise during the same period.

Chen’s comments come in advance of the 15th World Economic Forum Annual Meeting of the New Champions, also known as the Summer Davos Forum, which is scheduled to take place in Dalian, Liaoning province.

Chen advocated for the maintenance of stable, transparent, and predictable policies to bolster national growth stability and boost business confidence, thereby strengthening vertical industry momentum.

He emphasized the importance of China’s continued reforms and openness, which are vital for maintaining a competitive and equitable business environment. He noted that Dalian and Liaoning province have become attractive destinations for foreign investment due to improved business conditions and a more international, law-compliant environment.

The Summer Davos Forum has also enhanced Liaoning’s interaction with the global community, offering a platform to display technological advancements and economic achievements, thus aiding the province’s economic internationalization.

Despite facing recent protectionist actions from major trading partners, such as additional duties on Chinese-made electric vehicles by the European Commission and the U.S. targeting China’s emerging industries with tax increases, China remains committed to resolving trade issues through dialogue rather than sanctions.

Chen remarked that competitive disparities between countries often stem from variations in resources, technology levels, and workforce skills, rather than the production capacities often cited by critics.

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Japan's Demand-Driven Inflation Slows

Japan’s Demand-Driven Inflation Slows, Obscuring BOJ Rate Hike Outlook

Japan’s Demand-Driven Inflation Slows, Obscuring BOJ Rate Hike Outlook

Japan’s core inflation saw an uptick in May due to increased energy levies, but an index that removes the impact of fuel continued to decline for the ninth consecutive month, as shown in data released on Friday. This trend complicates the central bank’s decision on the timing of interest rate hikes.

The continued slowdown in “core core” inflation, which the Bank of Japan (BOJ) closely monitors as a crucial indicator of demand-driven price changes, casts doubt on the bank’s belief that rising wages will support consumption and maintain inflation on track to sustainably hit its 2% target.

The core consumer price index (CPI), which excludes volatile fresh food prices, increased by 2.5% in May compared to a year earlier, up from the previous month’s 2.2% gain. This rise was primarily due to a hike in the renewable energy levy and was close to the median market forecast of a 2.6% gain. However, inflation measured by an index excluding both fresh food and fuel slowed to 2.1% in May from 2.4% in April, marking the lowest year-on-year increase since September 2022.

Private-sector service inflation also slowed to 2.2% in May from 2.4% in the previous month, indicating that companies remain hesitant to pass on labor costs to consumers. This trend suggests that the anticipated boost to services inflation from strong pay hikes agreed upon in this year’s spring wage negotiations has not yet materialized.

The outlook for inflation is further complicated by a renewed rise in crude oil prices and increased import costs due to a weak yen. Analysts predict that core CPI could accelerate to nearly 3% later this month because of rising raw material costs. However, such pressure could negatively impact consumption and deter companies from raising prices, which would hamper the BOJ’s efforts to sustain underlying, demand-driven inflation around its 2% target.

Real wage growth in Japan remains weak, and there is no substantial data confirming that demand-driven inflation is accelerating. As a result, it is unlikely that the BOJ will raise rates before October-December this year.

The BOJ ended negative rates and bond yield control in March, marking a significant shift from its decade-long radical stimulus program. With inflation surpassing its 2% target for two years, the BOJ has hinted at raising short-term rates to levels that stabilize the economy, which analysts estimate to be between 1-2%. Many economists anticipate that the BOJ will increase interest rates to 0.25% this year, though opinions are divided on whether this will happen in July or later in the year.

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USD/JPY Holds Steady Near 147.00 as Yen Weakens on Trade Tensions and BoJ Rate Outlook

USD/JPY Holds Steady Near 147.00 as Yen Weakens on Trade Tensions and BoJ Rate Outlook

The Japanese Yen (JPY) continues to trade with a bearish bias on Wednesday, keeping the USD/JPY pair firm around the 147.00 mark during the Asian session. A stronger US Dollar and persistent concerns over rising trade tensions are weighing heavily on the Yen, as markets brace for the impact of US tariffs on Japanese goods starting August 1. 

Former US President Donald Trump’s announcement of a 25% tariff on Japanese imports, coupled with the threat of retaliatory action, has sparked renewed fears over Japan’s economic resilience. The country’s Q1 GDP contracted, real wages in May dropped at their steepest pace in nearly two years, and political uncertainty is rising ahead of the July 20 House of Councillors election. Recent polls suggest the ruling LDP-Komeito coalition may struggle to retain its majority, further dampening investor confidence. 

These developments have led traders to scale back expectations of a rate hike by the Bank of Japan this year. The combination of domestic headwinds and external pressure is weakening the JPY, while the US Dollar continues to gain on expectations that rising tariffs will stoke inflation and prompt the Federal Reserve to maintain a hawkish stance. 

The Fed’s June decision to hold interest rates steady, along with a strong US jobs report, has reinforced the belief that rate cuts may be delayed until at least October. The FOMC meeting minutes, due later today, will be closely watched for insights into the Fed’s policy trajectory. Markets currently anticipate up to 50 basis points in rate cuts by year-end. 

Technical Outlook: Bullish Momentum Builds 

Technically, USD/JPY’s break and close above the 100-day Simple Moving Average (SMA) — for the first time since February — signals potential for further gains. Positive momentum on the daily chart supports a move toward the 147.60–147.65 resistance area, with the 148.00 handle, a key June high, in sight. 

On the downside, immediate support lies near 146.50, with the 100-day SMA just below 146.00 acting as a critical pivot. A decisive break below this level could shift momentum in favor of bears, opening room for deeper losses. 

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NZD/USD gains ground to near 0.5700 on weaker US PMI data

During the early Asian session on Thursday, the NZD/USD pair was trading slightly higher at 0.5690. The Greenback falls against the New Zealand Dollar (NZD) as US economic data disappoints. Investors will keenly monitor developments in the rekindled trade battle between the United States and China, the world’s two largest economies. 

The weaker US Services Purchasing Manager Index (PMI) could weigh on the Greenback and generate a tailwind for the pair. The US ISM Services PMI fell to 52.8 in January from 54.0 (revised from 54.1) in December. This reading came in below the market consensus of 54.3.

On the other hand, New Zealand’s fourth-quarter employment report will put the RBNZ on pace to decrease the Official Cash Rate (OCR) by 50 basis points (bps) to 3.75% this month. Statistics New Zealand said on Wednesday that the country’s unemployment rate increased to 5.1% in Q4, up from 4.8% the previous quarter. This result was a four-year high and exceeded the 25-year average of 4.8%. Rising expectations that the Reserve Bank of New Zealand (RBNZ) may decrease interest rates may further impact on the New Zealand Dollar (NZD).

“In line with RBNZ guidance, markets continue to imply another 50bps rate cut to 3.75% at the February 19 meeting and the policy rate to through around 3.00% over the next 12 months. Bottom line: NZ-US 2-year bond yield spreads can further weigh on NZD/USD,” noted Société Générale’s FX analysts. 

On Tuesday, the finance ministry in China unveiled a package of tariffs on various US products such as crude oil, farm equipment, and some autos in a sharp response to an announcement made by US President Donald Trump imposing a 10% tariff on Chinese imports. Further, China served notice to several companies including Google for potential sanctions in response to Trump’s tariffs. Any sign of uncertainty or a rising trade war tension may see the China-proxy Kiwi being dragged lower, as China remains one of the major trading partners to New Zealand.

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JPY Recovers Losses vs. USD, Bullish Outlook Intact

Japanese Yen Recovers Some Losses Against USD; Bullish Outlook Remains Intact

The Japanese yen (JPY) cut some of its intraday losses against the US dollar (USD) on Monday, bringing the USD/JPY pair back below the mid-155.00s during the early European session. The Bank of Japan’s (BoJ) Summary of Opinions showed conversations about the possibility of further hikes in interest rates. Furthermore, Tokyo’s core inflation increased at the quickest annual rate in nearly a year, raising expectations of further policy tightening by the BoJ, which supports the JPY.

Beyond monetary policy, narrowing interest rate differentials between Japan and other major economies, including the US, alongside a broader risk-off sentiment, provide additional support to the safe-haven JPY. However, concerns over the economic impact of US President Donald Trump’s newly announced trade tariffs limit the yen’s upside. Meanwhile, the USD remains broadly strong, allowing the USD/JPY pair to maintain its positive momentum for a second consecutive day, ahead of the upcoming US ISM Manufacturing PMI report.

Yen Gains Traction Amid BoJ Rate Hike Bets and Trade War Fears

US President Donald Trump signed an executive order on Saturday to impose 25% tariffs on imports from Canada and Mexico and 10% tariffs on Chinese goods, effective Tuesday.

Canada’s Prime Minister Justin Trudeau, Mexico’s President Claudia Sheinbaum, and China’s foreign ministry all replied quickly, indicating probable retaliation. The US Dollar continues to climb, approaching a two-year high last hit in January, supporting the USD/JPY pair’s upward trend.

The Bank of Japan’s latest Summary of Opinions, released on Monday, showed that policymakers are thinking about additional rate hikes, though this has failed to appreciably lift the JPY.

Board members of the Bank of Japan stressed the need of continuing to raise interest rates if economic conditions and inflation remain stable.

Japan’s Finance Minister Katsunobu Kato stated that the government is closely monitoring the impact of Trump’s tariffs on the yen amid concerns over potential economic fallout.

Economy Minister Ryosei Akazawa reiterated Japan’s commitment to achieving the BoJ’s 2% inflation target while implementing measures to offset rising living costs.

The US-Japan yield spread remains near a multi-week low, which, coupled with risk aversion, could help stabilize the yen in the near term.

Investors now turn their focus to key US economic data, starting with today’s ISM Manufacturing PMI, followed by the highly anticipated Nonfarm Payrolls (NFP) report on Friday.

USD/JPY Faces Resistance Near 156.25; Bears in Control Below This Level

From a technical standpoint, last week’s strong rebound from the 50% Fibonacci retracement level of the December-January rally and the subsequent upside move favor bullish traders. However, additional gains beyond 156.00 may encounter resistance near last week’s swing high at 156.25. A sustained break above this level could spark a short-covering rally, pushing the pair towards:

  • 156.70-156.75 resistance
  • 157.00 psychological mark
  • 157.60 horizontal barrier
  • Potential extension towards 158.00, with an ultimate target at the 158.85-158.90 multi-month high from January 10

Conversely, on the downside:-

  • 155.00 serves as immediate support
  • Below this, watch for key levels at 154.55-154.50 and 154.00
  • A break below the 153.70 January low could accelerate the decline towards 153.30 and eventually 153.00

While the JPY is exhibiting some resilience, the overall trend remains unpredictable, with market participants intently watching economic indicators and geopolitical developments.

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Australian Dollar Drops as RBA Rate Cut Bets Rise, Fed Decision Looms

Australian Dollar Slides Amid Rising Odds of RBA Rate Cuts, Fed Decision in Focus

The Australian Dollar (AUD) extends its losing streak for a third consecutive session against the US Dollar (USD), weighed down by softer-than-expected inflation data from Australia.

Australia’s Consumer Price Index (CPI) rose by 0.2% quarter-on-quarter in Q4 2024, matching the previous quarter but missing the expected 0.3%. On an annual basis, CPI eased to 2.4% from 2.8% in Q3, below the market forecast of 2.5%. Despite December’s monthly CPI ticking up to 2.5% YoY, inflation remains within the Reserve Bank of Australia’s (RBA) 2%-3% target range. Meanwhile, the RBA’s Trimmed Mean CPI slowed to 3.2% YoY, its weakest pace in three years, slightly under the anticipated 3.3%.

Australian Treasurer Jim Chalmers expressed confidence that “the worst of the inflation challenge is behind us” and that a “soft landing” is increasingly likely. The cooling inflation strengthens the case for an RBA rate cut in February. The central bank has held the Official Cash Rate (OCR) steady at 4.35% since November 2023, emphasizing the need for inflation to “sustainably” return to target before considering a rate reduction.

AUD Pressured by Risk Aversion, Trump’s Tariff Threats

The AUD faces additional headwinds from risk-off sentiment following tariff threats by former US President Donald Trump. On Monday, Trump announced plans to impose tariffs on imports of key commodities, including computer chips, pharmaceuticals, steel, aluminum, and copper, aiming to boost US manufacturing.

Meanwhile, the US Dollar Index (DXY) holds firm around 108.00 as traders turn their attention to the upcoming Federal Reserve (Fed) interest rate decision. Market expectations, per the CME FedWatch tool, indicate near-certainty that the Fed will maintain its policy rate at 4.25%-4.50%. Investors will closely watch Fed Chair Jerome Powell’s press conference for guidance on future policy shifts.

Concerns over the potential inflationary impact of Trump’s trade policies add another layer of uncertainty. US Bank chief economist Beth Ann Bovino noted, “A number of White House proposals appear inflationary, which could keep the Fed in check.” Additionally, Treasury Secretary Scott Bessent has proposed universal tariffs on US imports starting at 2.5%, with Trump reportedly favoring even higher rates.

China’s Economic Slowdown Adds Pressure on AUD

The Australian Dollar remains vulnerable to China’s economic struggles. China’s NBS Manufacturing PMI dropped to 49.1 in January from 50.1, missing expectations, while the Non-Manufacturing PMI slipped to 50.2 from 52.2. As Australia’s largest trading partner, China’s weak data weighs heavily on the AUD.

Despite China’s recent stimulus measures, including a $7.25 billion investment in index products and long-term stock investments, concerns persist. Industrial profits fell 3.3% YoY in 2024, marking a third consecutive year of contraction, driven by weak demand, deflationary pressures, and a prolonged property sector slump.

Technical Outlook: AUD/USD Turns Bearish Below 0.6250

The AUD/USD pair trades near 0.6230 on Wednesday after breaking below the ascending channel on the daily chart, signaling a shift toward a bearish bias. The 14-day Relative Strength Index (RSI) has dropped below 50, reinforcing downside momentum.

A decisive break below key support at the lower boundary of the ascending channel strengthens the bearish outlook, potentially pushing AUD/USD toward 0.6131—its lowest level since April 2020. On the upside, immediate resistance lies at the nine-day Exponential Moving Average (EMA) at 0.6256. A rebound above this level could reintroduce a bullish bias, with the next upside target near 0.6360.

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US Dollar Surges as Trump Revives Tariff Threats

US Dollar Surges as Trump Revives Tariff Threats

The US dollar strengthened significantly against all major currencies after President Donald Trump and his Treasury Secretary reignited concerns about potential tariffs, raising fears that trade policies may return to the forefront. Risk-sensitive currencies, particularly those tied to China, saw sharp declines, while the euro weakened amid speculation that the European Union could soon face tariff pressures. Simultaneously, the Japanese yen took a hit as traders hedged against potential US inflation spikes and rising Treasury yields.

This market turbulence followed a Financial Times report indicating that Scott Bessent, the newly appointed Treasury Department official, supports a phased approach to implementing universal tariffs on US imports. The initial proposal suggests starting with a 2.5% tariff rate. However, President Trump hinted at a much broader scope, potentially targeting a range of imports from steel to semiconductor chips and suggesting higher tariff rates over time.

The administration’s “moderate” proposal involves a gradual increase in tariffs, reaching 20% over eight months in increments of 2.5% per month. This timeline has triggered speculation about more extreme scenarios and raised questions about the global trade concessions needed to halt these measures. Bessent’s approach, which allows businesses time to adjust, could also spark a rush of imports and exports to avoid higher future costs.

Amid these developments, financial markets are grappling with the potential outcomes. Traders are assessing whether the proposed tariff measures are fully priced in and evaluating the likelihood of de-escalation through negotiation.

On the positive side, any concessions or agreements that delay or reduce tariffs could stabilize markets. However, the risks of escalating tariffs, particularly if negotiations fail, remain a significant concern. Higher tariffs could disrupt global trade and have far-reaching implications for currency valuations.

While we initially favored long positions on the dollar, the unfolding tariff narrative has introduced significant uncertainty. Staying prepared for sudden shifts in policy and market dynamics is now crucial as the situation continues to evolve.

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Australian Dollar Weakens Amid Concerns Over Trump’s Trade Policies and Mixed Chinese Data

Australian Dollar Weakens Amid Concerns Over Trump’s Trade Policies and Mixed Chinese Data

The Australian Dollar (AUD) ended its three-day winning streak against the US Dollar (USD) on Monday, with the AUD/USD pair trading flat following the release of mixed Chinese Purchasing Managers’ Index (PMI) data. As a close trade partner, Australia’s economy is heavily influenced by China’s economic performance.

China’s National Bureau of Statistics (NBS) reported that the Manufacturing PMI fell to 49.1 in January, down from 50.1 in December, missing market expectations. Similarly, the Non-Manufacturing PMI dropped to 50.2 from the previous month’s 52.2. These weaker-than-expected figures suggest a slowdown in China’s economic recovery, weighing on the risk-sensitive Australian Dollar.

Despite fresh stimulus measures from China aimed at revitalizing its equity markets, the AUD struggled to gain momentum. The China Securities Regulatory Commission (CSRC) announced a second round of long-term stock investment pilot programs valued at 52 billion Yuan ($7.25 billion). However, these measures have done little to alleviate investor concerns about China’s economic challenges.

Risk Aversion Rises Amid Trump’s Trade Tariff Push

Broader market sentiment took a hit as reports emerged that US President Donald Trump’s advisers are pushing to impose 25% tariffs on Mexico and Canada as early as February 1, bypassing negotiations. According to the Wall Street Journal, Trump’s willingness to move swiftly on tariffs follows similar actions taken against Colombia, raising fears of escalating trade tensions and dampening demand for riskier assets like the Australian Dollar.

Adding to the negative outlook, China’s Industrial Profits declined by 3.3% year-over-year in 2024 to CNY 7,431.05 billion, marking the third consecutive year of contraction. This downturn highlights ongoing economic headwinds, including weak demand, rising deflationary pressures, and a prolonged slump in the property sector.

Technical Analysis: AUD/USD Eyes Key Resistance Amid Bullish Setup

The AUD/USD pair is trading near 0.6290 on Monday, showing signs of upward momentum within an ascending channel on the daily chart, indicating a potential bullish bias. The 14-day Relative Strength Index (RSI) remains slightly above 50, reflecting mild optimism in the market.

On the upside, the pair could retest the psychological resistance level at 0.6300, with the next target near the channel’s upper boundary around 0.6350.

Support levels are found at the nine-day Exponential Moving Average (EMA) of 0.6265, followed by the 14-day EMA at 0.6254. A stronger support lies near the channel’s lower boundary around 0.6240, which could act as a safety net in case of a downside correction.

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NZD/USD Struggles

NZD/USD Struggles Below 0.5700 Amid Trump’s Tariff Plans and Dovish RBNZ Expectations

The NZD/USD pair remains under pressure, trading near 0.5675 during the early Asian session on Friday. The New Zealand Dollar (NZD) faces headwinds due to uncertainty surrounding US President Donald Trump’s proposed tariffs on China and the dovish outlook of the Reserve Bank of New Zealand (RBNZ).

New Zealand’s Consumer Price Index (CPI) for the fourth quarter of 2024 indicated a continued decline in underlying inflation, strengthening expectations of additional rate cuts by the RBNZ. Swap markets now estimate a nearly 90% chance of a 50-basis-point (bps) rate cut on February 19, building on the two cuts already implemented in this cycle. The RBNZ is projected to deliver a total of 100 bps in rate cuts through the remainder of 2025.

Meanwhile, the downside for the pair could be capped by recent comments from Trump. Speaking at the World Economic Forum in Davos on Thursday, Trump called for immediate interest rate cuts by the US Federal Reserve (Fed). “With oil prices going down, I’ll demand that interest rates drop immediately, and likewise, they should be dropping all over the world,” Trump said.

Investors are now closely watching for further details on Trump’s tariff policies, alongside key US economic data releases. The flash US S&P Global Manufacturing and Services PMI for January will be a key focus later on Friday, along with the release of US Existing Home Sales and the Michigan Consumer Sentiment Index.

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US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

The dollar strengthened on Tuesday, driven by rising U.S. yields, putting pressure on low-yielding currencies like China’s yuan and Japan’s yen, which fell to its lowest level since 1986.

Benchmark 10-year Treasury yields increased nearly 14 basis points to 4.479% overnight. Analysts attributed this rise to expectations of Donald Trump winning the U.S. presidency, which could lead to higher tariffs and increased government borrowing.

As the dollar gained, the euro reversed part of a small rally following the first round of France’s election, which aligned with polling predictions. The euro last traded at $1.0735.

The yen dropped to 161.72 per dollar on Monday, its weakest in nearly 38 years, primarily due to the significant interest rate gap between the U.S. and Japan. On Tuesday, the yen traded at 161.55 per dollar in Asia and was under pressure from yen bears wary of potential intervention by Japanese authorities. The yen also hit a lifetime low of 173.67 against the euro on Monday and remained near that level on Tuesday.

In the bond market, the 10-year yield gap between U.S. and Japanese rates stood at 340 basis points, and nearly 440 basis points at the two-year tenor. China’s yuan, which reached a seven-month low against the dollar last week, faced similar pressure, with U.S. 10-year yields more than 220 basis points higher than Chinese government bond yields.

Robust manufacturing data in China and an announcement from the central bank about borrowing bonds, likely to sell them and stabilize falling yields, provided only a brief boost to the currency on Monday. The yuan last traded at 7.3043 in offshore markets on Tuesday, close to its June low.

The New Zealand dollar slipped 0.3% in early trade and was testing support at its 200-day moving average at $0.6075. The British pound remained steady at $1.2641. The Australian dollar hovered within its recent range at $0.6650, with traders focused on central bank minutes to gauge the likelihood of future interest rate hikes. Swaps market pricing suggests a one-in-three chance of a rate hike as soon as next month.

The question remains about the trigger for such a move. ING economist Rob Carnell noted that discussions have taken place, but the specific trigger for a hike is still uncertain. There is a leaning towards forecasting a hike at the August meeting.

Overall, the strengthening dollar and rising U.S. yields continue to exert pressure on low-yielding currencies, with markets closely watching upcoming central bank decisions and geopolitical developments.

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Cryptocurrency Move Back to Support the Pack to Level

If we have a look at the bearish start to the day in the majors and the Bitcoin move back to the level by $18,500 to the support pack. The Bitcoin to USD was seemed down at the level by 1.16% on this Thursday that reversing a 1.25% gain to the Wednesday to the ended the day at the level $18,260.0. At the start of the day, the Bitcoin rose to the early morning intraday to the high at the level before hitting the reverse level.

The major resistance level goes at the level by $18,878 and the Bitcoin fell to the intraday low to the level by $17,935.0.

The close term bullish pattern stayed flawless, disregarding the most recent pullback to sub-$18,000 levels. For the bears, Bitcoin would have to slide through the 62% FIB of $10,095 to shape a close term bearish pattern.

The Bitcoin was somewhere near at the level by 1.03% to $18,072.0. A blended beginning to the day saw Bitcoin ascend to an early morning high of $18,299.0 prior to tumbling to a low of $18,070.0.

Bitcoin left the significant help and obstruction levels untested from the get-go.

Somewhere else, it was a bearish beginning to the day for the majors. The Ripple’s XRP was somewhere around at the level 2.69% to lead the route down.

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Bitcoin Slips Down Below at Level $13,000 Since the Last Rally

Bitcoin Slips Down Below at Level $13,000 Since the Last Rally

The Bitcoin seems to the low at the level of $9,813 in September that managed the bitcoin to reach at the level high at $13,868. The bitcoin price is rejected to the sequential indicators on the 3-day chart.

If we have a look at the current candlestick of the 3-day chart it will seem significantly bearish and the TD sequential indicators are presented a sell signal. The 50- SMA seems down at the level of $10,600 and the 100 SMA at the level of $9,47.

The In/Out of the Money Around Price chart shows the closest and most grounded help region to be somewhere in the range of the level at $12,687 and $13,073 with near 624,000 BTC in volume. A break below this point can drive the cost of Bitcoin down to $11,914.

Despite the fact that bears appear to have assumed responsibility for the present moment, the powerful day by day upswing stays unblemished for Bitcoin. The 50-SMA and the 100-SMA harmonize around $11,200 which will go about as a critical help level. The MACD keeps bullish and the most basic obstruction level is still at $13,863. A breakout over this point can without much of a range drive the lead digital currency towards the untouched high at the level of $20,000.

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Bitcoin Price Clear the Path and Rose to the Level $13,000

Bitcoin Price Clear the Path and Rose to the Level $13,000

Bitcoin Price of the bulls has been the full control of the market to the price at the level of $11,340 to $12,835. The cryptocurrency had the largest to the single day that put the gain. The MACD shows the increasing the bullish momentum to price the growth anticipated.

The position detector is a convenient little apparatus that causes us to imagine solid opposition and backing levels. According to the everyday conjunction detector, there is an absence of solid obstruction levels on the potential gain. This should be empowering news for the buyers as they plan to bring BTC into the $13,000-zone.

Santiment’s holder’s distribution charts show you the number of addresses having a place with a specific symbolic section. According to the chart, the number of addresses holding 10,000-100,000 tokens tumbled from 111 on October 8 to 104 on October 20. This is an intensely bearish sign as it shows that the whales are selling off their property.

Bitcoin buyers have the opportunity to bring the cost into the level at $13,000 and even the $14,000 interference. The everyday intersection finder shows a total absence of solid opposition barriers straightforward.

For the bears, the drawback is covered off at the $12,000-$12,100 uphold divider. A break below that zone will bring the value down to $11,000, which has both the 50-day and 100-day SMA

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Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

The BTC/USD traded at the level of $11,355 after the mild rejection of the top-level $11,720 that losing some of the bullish.

Ethereum USD had a similar fate at the higher risk that seeing the longer pullback than the Bitcoin. If we talk about the XRP/USD is the clear loser after breaking below the 50 SMA and the 100 SMA on the daily chart that currently trading at the level of $0.2482 after yet facing another rejection.

Bitcoin, BTC to USD, fell by 1.02% on Tuesday. Incompletely turning around a 1.55% increase from Monday, Bitcoin finished the day at the level of $11,442.0.

It was a quiet beginning to the day. Bitcoin rose to a late morning intraday high to the level of $11,574.9 before operating reverse.

Missing the mark concerning the primary significant obstruction level at $11,830, Bitcoin tumbled to an early evening intraday low of $11,333.0.

Avoiding the primary significant help level at $11,201 Bitcoin quickly returned to $11,470 levels before moving back.

The close term bullish pattern stayed perfect, upheld by the most recent move back through to $11,000 levels. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to shape a close term bearish pattern.

Bitcoin was up by 0.22% to $11,467.0. A beginning to the day saw Bitcoin tumble to an early morning low of $11,427.0 before ascending to a high at the level of $11,467.0. Bitcoin left the support and Resistance levels untested at an early stage.

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Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Let’s have a look at the cryptocurrency that hovering near to the level at $10,600 mark. The Bitcoin price is consolidating to the 50-12 Hour SMA and the 200-12 Hours SMA. The strong resistance lies at the level 50-12 SMA that repeatedly rejected the price.

This repeated dismissal may drop the value down to the level at  $10,400 uphold level, which is by all accounts the main observable help level on the drawback. If case this level doesn’t hold firm, at that point you can anticipate that the cost should plunge below $10,000. For this situation, one can anticipate that BTC should tumble to the level of $9,700 before it experiences another solid help.

While this may not appear to be a huge number, remember that every one of these addresses holds a great many dollars worth of Bitcoin. The fishes using the stale value activity to merge their positions look good for the general market.

With respect to the top 50 digital forms of money, the greatest failures incorporate Compound, down 12% over the most recent 24 hours, UMA down 12%, OMG Network down at the level 13%, Yearn.finance down 16%, and Aave down 18%. The main bull among the sloths of bears is EOS, which broke out greatly as covered Tuesday.

Ethereum has since September 23, been holding inside a rising equal channel. Recuperation towards $400 flamed out marginally above $360 a week ago. On the drawback, the misfortunes that followed grasped uphold at the level of $335 throughout the end of the week, permitting the shrewd agreement sign to revitalize, making strides above $350.

The Ethereum selling pressure in the market halted the increase at the 50 SMA and 100 SMA. Ether fell below the climbing channel, confirming a bear banner.

The downside of a significant help zone shows that Ethereum is at grave risk of spiraling to the level at $300. Other than the various simple help zones, the most significant one lies somewhere in the range of $298 and $309. Previously, around 879,000 locations purchased almost 2 million ETH.

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Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

The Bitcoin moves back and shows the bearish to the start of the day with the support level at $10,900 to the broader market.

The Bitcoin BTC to USD is rose by the level at 1.33% this Tuesday and reversing the loss at the level of 0.83% on Monday.

It was a mixed start to the day. Bitcoin fell to an early morning low $10,674.2 before finding support.

Steering clear of the major support levels, Bitcoin struck a late morning high at the level of $10,815.4 before operating reverse.

Coming up short of the major resistance levels, Bitcoin slid to a late afternoon intraday low $10,654.0.

Steering clear of the first major support level at $10,585, Bitcoin rallied to a final hour intraday high at the level of $10,889.0.

Falling short of the first major resistance level at $10,915, Bitcoin eased back to end the day at sub-$10,860 levels.

The near-term bullish trend remained whole, in contempt of the latest pullback. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to form a near-term bearish trend. At the hour of composing, Bitcoin was somewhere around 0.28% to the level of $10,826.0. It was a blended beginning to the day. Bitcoin rose to an early morning high $10,866.0 before tumbling to a low $10,826.0.

Bitcoin started the significant help and obstruction levels untested from the get-go. Somewhere else, it was a blended beginning to the day.

Bitcoin Cash ABC (+0.54%), Bitcoin Cash SV to the level (+0.62%), and Crypto.com Coin (+0.65%) evaded the pattern right off the bat.

It was a bearish beginning to the day for the remainder of the majors, in any case. Binance Coin was somewhere around 1.18% to lead the way down.

https://xtreamforex.com/nasdaq-futures-shows-the-short/

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