Skip to main content

XtremeMarkets

Xtreme Markets Ltd

Web Trader
Register
Download App
Login
Affiliates
Xtreme Markets Logo

Market News

USD/CHF Continues to Slide, Approaching

USD/CHF Continues to Slide, Approaching 0.9050 Ahead of US Inflation Data Release

USD/CHF Continues to Slide, Approaching 0.9050 Ahead of US Inflation Data Release

USD/CHF edges lower for the second consecutive session, trading around 0.9060 during the Asian hours on Wednesday. The decline of the USD/CHF pair can be attributed to the weaker US Dollar (USD), as investors shrugged off the higher-than-expected US Producer Price Index (PPI) data for April. Investors are now awaiting the Consumer Price Index (CPI) report scheduled for release on Wednesday.

The US Bureau of Labor Statistics (BLS) reported that the PPI rose 0.5% month-over-month (MoM) in April, surpassing market expectations of a 0.3% increase. This rebound comes after a contraction of 0.1% in March. Additionally, the Core PPI, which excludes volatile food and energy prices, also surged by 0.5% MoM, exceeding projections of a 0.2% increase.

Following the release of the PPI data, Federal Reserve Chair Jerome Powell shared his views. According to a Reuters report, Powell anticipated a continued decline in inflation but expressed less confidence in the disinflation outlook compared to previous assessments. He highlighted that Gross Domestic Product (GDP) growth is expected to reach 2% or higher, attributing this positive forecast to the strength of the labor market.

In Switzerland, Producer and Import Prices (YoY) dropped by 1.8% in April, marking a slight improvement from the previous decline of 2.1%. This marks the twelfth consecutive period of decrease, albeit at the slowest rate since December 2023. On a monthly basis, consumer price inflation increased by 0.6%, following a 0.1% rise in the previous month.

Additionally, traders are expected to closely monitor the Industrial Production (YoY) data for the first quarter, scheduled for release on Friday. This report will provide insights into the volume of production across various industries, including factories and manufacturing, in Switzerland.

The overall market sentiment has been cautious, with investors weighing the implications of the US PPI data against the upcoming CPI report. The CPI is a critical measure of inflation, and its results could significantly influence market expectations regarding future monetary policy actions by the Federal Reserve.

The USD/CHF pair’s movement reflects broader market trends, where the USD’s performance is influenced by economic data releases and central bank communications. As traders await the CPI report, the USD/CHF pair may continue to experience volatility.

In conclusion, the USD/CHF pair’s decline during the Asian session is driven by a weaker USD despite higher-than-expected PPI data. With key economic data releases on the horizon, particularly the US CPI report, traders remain vigilant, assessing how these figures will shape future monetary policy decisions and overall market dynamics.

Read More
GBP/USD Stays Above 1.2500 Ahead of Tuesday's UK Labor Data

GBP/USD Stays Above 1.2500 Ahead of Tuesday’s UK Labor Data

GBP/USD Stays Above 1.2500 Ahead of Tuesday’s UK Labor Data

During Monday’s Asian trading session, the GBP/USD pair saw an uptick, reaching close to 1.2520, influenced by a surge in risk appetite. This rise was supported by unexpectedly strong UK Gross Domestic Product (GDP) data released on Friday, indicating that the UK economy grew by 0.6% in the first quarter. This growth rate, the highest in over two years, marked the end of a brief recession and exceeded forecasts.

Despite this positive economic momentum, the British Pound faced headwinds following dovish comments from Huw Pill, the Chief Economist at the Bank of England (BoE). Although the BoE’s Monetary Policy Committee (MPC) held interest rates steady at 5.25% last Thursday, Pill suggested that rate cuts might be on the horizon, reflecting a growing inclination among some MPC members.

Looking ahead, market focus will shift to the upcoming UK labor market data due on Tuesday. Analysts are anticipating the Claimant Count Change to reveal a rise in jobless claims for April. Moreover, the International Labour Organization (ILO) Unemployment Rate for the three-month period is expected to show an uptick in unemployment, adding another layer of complexity to the economic outlook.

On the other side of the Atlantic, investors in the United States are gearing up for a week filled with significant economic reports that could influence market dynamics. Key indicators to watch include the Consumer Price Index (CPI), Producer Price Index (PPI), and Retail Sales data. These figures will provide further insights into the economic environment and potential policy responses from the Federal Reserve.

Meanwhile, the US Dollar faced challenges last Friday following the release of the University of Michigan Consumer Sentiment Index, which unexpectedly fell to a six-month low of 67.4 in May from 77.2 in April, significantly below the forecasted 76. This decline in consumer confidence could have adverse implications for consumer spending and economic growth.

However, the losses in the US Dollar were somewhat mitigated by a rise in inflation expectations. The one-year inflation outlook increased to 3.5%, its highest level in six months, up from 3.2% in April. Furthermore, the five-year inflation forecast also edged higher to 3.1%, suggesting sustained inflationary pressures. These inflation expectations contributed to a slight advance in US Treasury yields, which may offer some support to the US Dollar moving forward.

As both economies brace for more data, the interplay between economic indicators and central bank policies will continue to be a key driver of the GBP/USD exchange rate.

Read More
EUR/USD Climbs as Weakening Labor Market Data Pressures US Dollar

EUR/USD Climbs as Weakening Labor Market Data Pressures US Dollar

EUR/USD Climbs as Weakening Labor Market Data Pressures US Dollar

The EUR/USD pair remains confined within a narrow trading range just beneath the critical resistance level of 1.0800 during Friday’s European trading session. This comes after the pair rebounded sharply from 1.0725. Despite the relative calm, the currency pair maintains its strength, with investors appearing to have fully absorbed the anticipation that the European Central Bank (ECB) will commence its rate reduction process starting in June.

The ECB is currently facing internal divisions regarding the extension of the rate-cutting cycle beyond the initial June reduction. Some members of the ECB are concerned that further rate cuts starting in July could reignite inflationary pressures. This perspective was highlighted by ECB policymaker and Governor of the Bank of Greece, Yannis Stournaras, during an interview with a Greek media outlet last week. Governor Stournaras projected three rate cuts for the year, noting that the economic recovery observed in the first quarter supports the likelihood of this scenario over a potential four cuts. The Eurozone’s economy outperformed expectations in the January-March period, posting a growth rate of 0.3% compared to the anticipated 0.1%.

In contrast, ECB Governing Council member and Governor of Austria’s central bank, Robert Holzmann, expressed a more cautious stance. In remarks reported by Reuters on Wednesday, Governor Holzmann indicated his reluctance to lower key interest rates “too quickly or too strongly,” citing the need for a more measured approach.

This week, the EUR/USD pair’s movement has largely been influenced by overall market sentiment, due in part to a lack of significant economic data from both the Eurozone and the United States. However, the focus is set to shift dramatically next week with the release of the U.S. Consumer Price Index (CPI) data for April, scheduled for Wednesday. This critical indicator is closely monitored as it provides significant insights into inflation trends, which are integral to the Federal Reserve’s policy decisions.

Investors and traders alike are positioning themselves cautiously as they anticipate the data, which could provide further clues on the trajectory of U.S. monetary policy and its implications for the dollar. The outcome of this report could potentially break the EUR/USD pair out of its current holding pattern, either reinforcing the strength seen following its recent recovery or pulling it back down towards previous levels depending on the nature of the data revealed.

Read More
USD/CHF Rises Above 0.9080 Amid Hawkish Fed Remarks, Stronger US Dollar

USD/CHF Rises Above 0.9080 Amid Hawkish Fed Remarks, Stronger US Dollar

USD/CHF Rises Above 0.9080 Amid Hawkish Fed Remarks, Stronger US Dollar

During early European trading on Wednesday, the USD/CHF currency pair recorded modest gains, hovering around 0.9085. The rise is largely attributed to the U.S. dollar’s recovery, spurred by hawkish comments from Federal Reserve officials. These remarks have tempered expectations for potential interest rate cuts in 2024.

The focus is on upcoming speeches by Federal Reserve officials, including Philip Jefferson, Susan Collins, and Lisa Cook, expected later on Wednesday. These addresses are highly anticipated as traders seek further guidance on the direction of U.S. monetary policy.

On Tuesday, Neel Kashkari, President of the Minneapolis Federal Reserve, made hawkish statements, significantly impacting the U.S. dollar. Kashkari emphasized that it is premature to conclude that inflation has peaked, suggesting that the Fed might not cut interest rates this year unless inflation pressures visibly subside.

Market sentiment is reflected in the reduced likelihood of a Fed rate cut this year. Currently, there’s a 65.7% probability of at least a 25 basis point reduction in rates by September, as indicated by the CME FedWatch Tool. Further indicators of economic sentiment will come from the upcoming first release of the U.S. University of Michigan Consumer Sentiment Index, expected on Friday. This index is forecasted to drop slightly to 76.0 in May from April’s 77.2.

On the Swiss side, geopolitical tensions remain a point of concern due to ongoing conflicts in the Middle East. Despite a proposed ceasefire plan between Israel and Hamas, Israel’s war cabinet has decided to continue military operations in Gaza. The New York Times reports that Israel has rejected the ceasefire proposal from Hamas, claiming it fails to meet their conditions. Such developments may drive safe-haven flows, potentially strengthening the Swiss Franc against the U.S. dollar as investors seek stability amidst rising geopolitical tensions.

Read More
USD/JPY Ends Three-Day Slide

USD/JPY Ends Three-Day Slide Above 153.50 as Yellen Warns on Currency Intervention

USD/JPY Ends Three-Day Slide Above 153.50 as Yellen Warns on Currency Intervention

The USD/JPY pair staged a notable reversal during Monday’s Asian trading session, breaking a three-day losing streak. This upward movement was fueled by a modest recovery in the US Dollar (USD) and remarks made by US Treasury Secretary Janet Yellen regarding potential Japanese interventions from the previous week. Currently, the pair is hovering around 153.55, marking a 0.35% gain for the day.

Over the weekend, US Treasury Secretary Janet Yellen acknowledged the significant fluctuations in the Japanese Yen’s value but refrained from confirming whether Japan had intervened to support its currency. Yellen’s stance on potential Japanese interventions has exhibited variability over the past couple of years, often highlighting the importance of a Group of Seven consensus favoring market-driven currency rates. She stressed that interventions should primarily aim to reduce market volatility rather than manipulate currency values. In contrast, Japan’s Finance Minister Shunichi Suzuki has not verified any interventions, according to Bloomberg reports.

The speculation surrounding a potential interest rate cut by the US Federal Reserve (Fed) in September has intensified following the release of weaker-than-expected US employment data. This has contributed to some selling pressure on the Greenback. According to the CME FedWatch tool, traders are currently pricing in an 85.5% probability of no change to the Fed’s fed fund rate in June, while the likelihood of a rate cut in September has surged to 90%.

The latest US employment report, released last Friday, provided indications of a slowdown in the US economy. Nonfarm Payrolls (NFP) increased by 175K in April, down from 315K in March (revised from 303K), falling short of the estimated 243K. This marked the lowest increase since October 2023. Additionally, the Unemployment Rate rose to 3.9% in April, while Average Hourly Earnings experienced a 3.9% year-on-year decline. Furthermore, the US ISM Services Purchasing Managers’ Index (PMI) fell into contractionary territory, decreasing from 51.4 in March to 49.4 in April, below the market consensus of 52.0. These indicators collectively suggest a potential slowdown in the US economic recovery.

Read More
EUR/USD Nears 1.0750 as Risk Appetite Rebounds

EUR/USD Nears 1.0750 as Risk Appetite Rebounds

EUR/USD Nears 1.0750 as Risk Appetite Rebounds

The EUR/USD pair continued its upward momentum, marking a third consecutive day of gains as it hovered around the 1.0730 level during Friday’s Asian session. This surge in the currency pair was fueled by a resurgence in risk appetite, particularly favoring risk-sensitive currencies such as the Euro. Investors found reassurance in the stabilizing risk sentiment, which preceded the eagerly awaited release of US Nonfarm Payrolls (NFP) data.

The upcoming NFP report for April is anticipated to reveal a reading of 243K, compared to the previous figure of 303K. Additionally, market attention is also focused on the release of Average Hourly Earnings and ISM Services PMI later in the day. These data releases are expected to provide further insights into the current state of the United States economy, influencing market sentiment and trading dynamics.

In the backdrop of these developments, Thursday’s release of US Initial Jobless Claims data for the week ending April 26 showcased no change from the previous week, holding steady at 208K. This figure, which stands as the lowest level in two months and notably below market expectations of 212K, could potentially afford the Federal Reserve greater flexibility in delaying interest rate cuts.

Shifting focus to productivity metrics, US Nonfarm Productivity exhibited a modest increase of 0.3% in the first quarter, following an upwardly revised 3.5% surge in the preceding quarter. However, this growth fell short of the anticipated 0.8% rise, marking the slowest pace of productivity expansion since the January-March quarter of 2023.

Meanwhile, in the Eurozone, Philip Lane, the Chief Economist of the European Central Bank (ECB), delivered insights during a virtual guest lecture at the University of Stanford. Lane highlighted that while inflation has decreased more rapidly than initially foreseen by the ECB, the transmission of policy effects is experiencing delays. He emphasized the ongoing unfolding of the tightening impacts from previous rate hikes, reaffirming the ECB’s commitment to a data-dependent approach rather than a rigid rate trajectory.

Read More
USD/CAD Rises Above 1.3750 as Markets Await Fed Rate Decision

USD/CAD Rises Above 1.3750 as Markets Await Fed Rate Decision

USD/CAD Rises Above 1.3750 as Markets Await Fed Rate Decision

The USD/CAD currency pair was trading positively around 1.3778 on Wednesday during the early trading hours in Asia. The pair gained strength, influenced by weaker economic indicators from Canada and a robust US Dollar. Specifically, Canada’s Gross Domestic Product (GDP) for February underperformed expectations, growing only 0.2% month-over-month compared to the anticipated 0.3%, as reported by Statistics Canada. This slower growth rate, down from January’s 0.5% expansion, put downward pressure on the Canadian Dollar (Loonie).

On the other side of the pair, the US Dollar remained firm, trading above 106.30, supported by various economic reports and market sentiments. The focus now turns to the US Federal Reserve’s interest rate decision, anticipated later on Wednesday. Market consensus does not foresee a rate change at this meeting. However, Federal Reserve Chair Jerome Powell’s subsequent press conference is eagerly awaited for any insights into future monetary policy, particularly regarding the persistence of high rates.

Market expectations have shifted recently, with the CME FedWatch Tool indicating that the likelihood of a Fed rate cut in September has decreased to 44%, a significant drop from 60% earlier in the week. This adjustment reflects a more cautious approach by financial markets towards anticipating rate cuts, possibly underpinning the Dollar further.

Additionally, several key economic indicators are scheduled for release. These include the US ADP Employment Change, ISM Manufacturing PMI, and the Canadian counterpart from S&P Global. These reports could provide further clues about the economic health of both countries. The US economy showed mixed signals as the Conference Board’s Consumer Confidence Index dropped to its lowest since July 2022, indicating a decline in optimism among consumers. In contrast, the Employment Cost Index in the US for the first quarter of 2024 indicated a stronger-than-expected rise of 1.2% year-over-year, surpassing the consensus forecast of 1.0%.

Meanwhile, Canada’s economic prospects seem challenged, not only by internal metrics but also by external factors like oil prices. As the leading crude oil exporter to the US, Canada’s currency is susceptible to fluctuations in oil markets. Recently, declining oil prices have exerted additional selling pressure on the Loonie, complicating the economic outlook and potentially prompting the Bank of Canada to consider a rate cut in June to support economic growth.

Investors and traders are keeping a close watch on these developments, as any new economic data or policy changes could significantly influence the direction of the USD/CAD pair in the coming days.

Read More

U.S. stocks fail to change much as the quarter end approaches

U.S. stocks failed to change much as the quarter end approaches

As investors analyzed remarks made by central bankers at a panel in Europe and anticipated more quarterly profit reports, U.S. stocks ended the day with no movement. On Wednesday, the Dow Jones Industrial Average rose 82.32 points, or 0.3%, to 31029.31. The NASDAQ Composite Index dropped 3.65 points, or 0.03 percent, to 11177.89, while the S&P 500 dropped 2.72 points, or less than 0.1 percent, to 3818.83.

The market is having a brutal first half after three years in a row of double-digit increases. The S&P 500 has lost roughly 20 percent of its value so far this year, making it likely that this will be its worst first half in fifty years.

Rising interest rates and sluggish growth are two factors that have a negative impact on stock prices. Stocks have also been affected by the swift return of inflation, a faltering Chinese economy, and a conflict in Ukraine that startled the commodity markets. Before the second half of the year begins on Friday, investors need to reorganise, according to State Street managing director Michael Arone. As the Fourth of July and the first half came to an end, he added, “We’re limping.”

Investors should take comfort in the fact that a poor first half does not imply a poor second half. The S&P 500 experienced a first-half decline of 21% and a second-half gain of 27% in 1970, concluding the year approximately level. As a result of a number of data releases showing that increased prices are dampening consumer optimism, stocks started the week on a low note. Investors continued to worry that if central banks tightened policy too quickly to combat inflation, it may trigger a recession.

At the European Central Bank’s annual economic policy conference in Portugal, Federal Reserve Chairman Jerome Powell said the epidemic had disturbed the economy in ways that could continue to generate more inflation or volatility in pricing pressures than previously. Is there a chance that we might go too far? There is unquestionably a risk, Mr. Powell remarked on Wednesday. “Failing to restore pricing stability would be the worse mistake to make, to put it that way,”

Some investors are losing faith in the Fed’s ability to arrange a “soft landing,” in which interest rates increase to combat inflation without causing the economy to enter a recession. “Until we have a strong indication that inflation has peaked, we anticipate markets will at best remain stable. Our belief in a soft landing has diminished even further, and the market is moving in that direction as well, according to Pictet Asset Management multiasset strategist Arun Sai.

After three straight days of advances, the yield on the benchmark 10-year Treasury note decreased to 3.091% from 3.206 percent on Tuesday. Prices increase as yields decrease. Investors are anticipating more corporate profit reports as the second quarter draws to a close. Even though FactSet projects a relatively small 5.8 percent increase in S&P 500 company earnings, early misses raise doubts about that estimate.

The market has been rattled by some earnings reports, according to Andrew Slimmon, a portfolio manager at Morgan Stanley Investment Management. “I assumed we’d see a rally into month-end,” he said. Bed Bath & Beyond, a retailer, provided an example of the point on Wednesday. After the company reported a larger quarterly loss than Wall Street anticipated and announced the departure of its chief executive, the shares dropped $1.54, or 24 percent, to $4.99.

General Mills’ stock increased $4.46, or 6.3 percent, to $74.72 after the firm reported that higher prices helped boost sales despite the food manufacturer selling fewer products overall. In 2022, consumer staples stocks have excelled. Carnival, a cruise line, dropped $1.46, or 14%, to $8.87, quickening a loss sparked by several price-target reductions made by stock research analysts.

Bitcoin was trading at around $20,000. After creditors filed a lawsuit against the cryptocurrency hedge fund Three Arrows Capital for failing to pay back debts, a court in the British Virgin Islands ordered it to liquidate. Stoxx Europe 600, a continental index, decreased 0.7 percent. Most important benchmarks fell in Asia. Hong Kong’s Hang Seng Index dropped 1.9 percent, while the Shanghai Composite Index dropped 1.4 percent. Nikkei 225 in Japan fell 0.9 percent.

Read More

Stocks drop following poor consumer confidence reading

Stocks drop following poor consumer confidence reading

As investors analyzed new economic data in search of hints regarding the rate of monetary policy tightening, U.S. stocks declined on Tuesday, giving up early gains and sliding for a second straight day. To reach 30946.99, the Dow Jones Industrial Average fell 491.27 points, or 1.6 percent. Earlier in the session, the blue-chip index rose as much as 1.4 percent. The S&P 500 dropped 78.56 points, or 2%, to finish the day at 3821.55. The NASDAQ Composite Index, which focuses on technology, dropped 343.01 points, or 3%, to 11181.54.

The major indices have been extremely sensitive to news and data in recent sessions as investors evaluate how long the market’s recovery from its lows will last. As a result of the Federal Reserve raising interest rates earlier this month, the S&P 500 entered a bear market or a 20 percent decline from its recent top.

Stocks’ initial momentum was gone. Tuesday, following data from the Conference Board that revealed consumers’ short-term expectations for the American economy had fallen precipitously to their lowest level in a decade. As Americans continue to weigh the effects of high prices and rising rates, consumer confidence dropped for a second month in a row. The unfavorable report comes after a barometer from the University of Michigan issued on Friday indicated that consumer mood had reached its lowest level ever.

The unfavourable report comes after a barometer from the University of Michigan issued on Friday indicated that consumer mood had reached its lowest level ever. In a paradoxical view where bad news was good news, weak economic statistics fuelled a stock market rise last week as investors thought the Fed could delay its monetary-policy tightening. According to Boston Partners’ Mike Mullaney, head of global markets research, Tuesday’s consumer reading is “poor news that’s awful news.”

“The Fed is going to be that much more aggressive in squashing inflation,” he added. “If inflation expectations are rising up to the amount they are right now. Market volatility, as demonstrated by Tuesday’s intraday reversal, might also be linked to a lack of liquidity, according to Jim Besaw of GenTrust. Because there are “not a lot of risk takers right now,” the chief investment officer claimed that he has observed markets move more than anticipated when carrying out trades for customers. The lack of liquidity over the past few months has made a lot of problems worse, he said.

Portfolio rebalancing may have an effect on market movement as the month and the quarter come to an end later this week, Mr. Besaw added With a decline of almost 20% this year, the S&P 500 is on pace for its worst first-half performance since 1970. Eloise Goulder, head of the global market, data, and positioning intelligence teams in equity trading at JPMorgan Chase, said: “The challenge is when we hit a market bottom and when we get that turning point, and it’s not necessarily straight away.” She continued, “We need to see the combination of inflation having peaked, and data having steadied, for me to get bullish about the second half of the year.”

Other information made public on Tuesday morning revealed that the increase in property prices in April somewhat slowed. The average home price in the nation’s main metropolitan areas, as measured by the S&P CoreLogic Case-Shiller National Home Price Index, increased at a somewhat slower annualised rate in April compared to March. Mortgage rates doubled earlier this month, reaching their highest point in more than 13 years.

In other news, China’s National Health Commission announced that it would relax its rigorous quarantine regulations for visitors from other countries in an effort to strike a compromise between its zero-Covid policy and the strains on its second-largest economy. Following the consumer confidence report, consumer-discretionary stocks drove the S&P 500 lower. Nike was one of the index’s worst laggards, dropping $7.72, or 7 percent, to $102.78 after the sneaker manufacturer reported nearly flat quarterly sales and a drop in earnings.

Mega-cap technology stocks also experienced a sell-off, which hurt the major indices. Each of Apple, Microsoft, and parent company Alphabet saw at least a 3 percent decline. To reach $107.40, Amazon.com lost $5.82, or 5.1 percent. The benchmark 10-year U.S. Treasury note’s yield increased in the bond market, rising to 3.206 percent from 3.193 percent on Monday. When bond prices decrease, yields increase. Globally, the Stoxx Europe 600 index increased by 0.3% thanks to a surge in equities for manufacturing and energy sectors. After the announcement, indexes generally increased throughout Asia.

Read More

Stock Market declines following massive rally last week

Stock Market declines following massive rally last week

U.S. stocks declined on Monday, erasing some of the gains made during a surge last week as expectations for the direction of interest-rate rises by the Federal Reserve softened. Early gains were erased by the S&P 500, which dropped 11.63 points, or 0.3 percent, to close at 3900.11. The technology-focused NASDAQ Composite Index fell 83.07 points, or 0.7 percent, to 11524.55, while the Dow Jones Industrial Average dropped 62.42 points, or 0.2 percent, to 31438.26.

Investors were reportedly in a holding pattern, and traders reported low volumes and a calm day. Justin Wiggs, managing director in stock trading at Stifel Nicolaus, compared the paltry volumes to those last week and said, “It’s extremely lethargic today.” He continued, describing how FTSE Russell’s stock benchmarks were rebalanced on Friday by adding and removing stocks.

The S&P 500 experienced its highest one-day percentage rise in the past two years on Friday. Investors have revised their expectations for the Federal Reserve to tighten monetary policy at a rapid pace in response to weaker-than-expected U.S. economic statistics. This year’s market volatility has been triggered by the Fed’s efforts to raise interest rates and rein in inflation. Earlier this month, the S&P 500 entered a bear market, or a 20 percent decline from its most recent top.

However, recent studies have shown that the American economy—and possibly inflation—is starting to slow down. The most recent proof was released on Friday, when the University of Michigan reduced its June estimate of inflation forecasts over the following five to ten years down, to 3.1 percent from 3.3 percent.

In other economic news, data released on Monday revealed that durable goods orders increased more than anticipated in May. According to the National Association of Realtors’ monthly index, U.S. pending-home sales increased by 0.7 percent in May. The rise occurs despite rising mortgage rates and ends a six-month slump.

Florian Ielpo, head of macro at Lombard Odier Investment Managers in Geneva, stated that “any good macroeconomic news is perceived as bad market news.” “If we continue to experience robust growth and inflation, the Fed and ECB will raise interest rates, and we will experience a recession.” He predicted that as investors rebalance their portfolios ahead of Thursday, which is the end of the second quarter, stocks are likely to receive more support in the near term.

He claimed that the recent signals of inflation having peaked and bearish market posture together “provide a double punch that is pushing equities up.” In recent weeks, Treasury yields have decreased as investors gambled that the Fed’s ambitions to raise rates will be thwarted by a deteriorating economy. According to experts at UBS, investors are boosting their wagers that the Fed will start lowering rates in the middle of 2023.

Investors have reduced their anticipation of rate increases this year as well. According to CME Group, traders assigned a 52 percent probability that the Fed will increase interest rates by an additional 2 percentage points this year in futures bets made on Monday. This is a decrease from a chance of 74% one week prior.

The benchmark 10-year Treasury note’s yield was 3.133% on Monday, up from 3.125% on Friday but still significantly below its peak of 3.482% this month. Bond yields increase as prices decline. Some of the worst performers were consumer stocks. Following a proxy advisory firm’s recommendation that Spirit Airlines investors approve a planned merger with Frontier Airlines, the airline’s shares dropped $1.95, or 8%, to $22.57. Spirit received multiple offers from JetBlue Airways as well as a sweetened offer from Frontier on Friday. The offers will be voted on by Spirit’s shareholders at a special meeting on Thursday.

Read More

After stock rebound week, stock futures are marginally higher

After stock rebound week, stock futures are marginally higher

Following a significant recovery last week from this year’s sharp declines, U.S. stock futures increased marginally on Monday morning. Wall Street is getting ready to close out the worst first half for equities in decades despite the rebound. Futures for the Dow Jones Industrial Average increased 30 points, or 0.1 percent. The NASDAQ 100 futures increased by 0.51 percent and the S&P 500 futures increased by 0.22 percent. These actions came after a pivotal recovery week in which the Dow industrials rose by more than 800 points, or 2.7 percent. The NASDAQ Composite rose 3.3 percent, while the S&P 500 rose 3.1 percent.

The major averages recorded their first positive week since May thanks to their increases. The Dow increased 5.4% last week. The NASDAQ Composite rose 7.5 percent, while the S&P 500 rose 6.5 percent. Participants in the market kept determining whether stocks have reached a bottom or are only momentarily recovering from oversold levels. As investors rebalance their holdings at the end of the quarter, stocks may continue to rise in the near future. For the foreseeable future, the equity market is “expected to be… in a go-nowhere-fast phase,”

“Earnings are both a bright spot and a wildcard, while inflation is running hot, mood is muted, liquidity is disappearing, etc. Overall, that suggests to us that we’re likely to be in a sideways trending pattern for some time, Sandven continued. Wall Street anticipates the most recent reading of durable goods orders to be released Monday before the bell on the economic front.

Read More

Fears about economy is growing as Wall Street’s hiring frenzy eases

Fears about economy is growing as Wall Street’s hiring frenzy eases

After a hiring frenzy last year, Wall Street is slowing down due to the growing uncertainty around the U.S. economic future and the ensuing decline in the financial markets. In 2021 and early this year, Wall Street firms, including banks like Citigroup Inc, JPMorgan Chase & Co, and Wells Fargo & Co, were obliged to pay more to attract and keep employees due to fierce hiring competition. The increase in bonuses was the biggest in 15 years.

However, hiring fever is waning, according to executives, recruitment experts, and recent data. According to Alan Johnson, managing director of compensation consultancy firm Johnson Associates, “by the end of 2021 it was white hot with unprecedented demand for employment and pay.” “It’s changing swiftly from extremely hot to normal, and by the end of the year it might even turn cold. Undoubtedly, a change is taking place.”

According to the most recent U.S. Bureau of Labor Statistics data, firms in the securities, commodity contracts, investments, funds, and trusts sector were still adding jobs, but the rate of growth was noticeably slower in May, adding only 1,200 positions as opposed to 4,600 in April. In contrast, the industry experienced its largest annual headcount growth since 2000 in 2021, when the monthly average was 3,400.

In light of the weakening global markets, some clients have paused some talent searches, according to Alberto Mirabal, senior vice president for investment banking at the recruitment firm GQR Global Markets. These clients want to “see how things shake out” before adding to their already sizable teams.

We’re observing a little slowness, he added. Some Wall Street firms are concerned about the possibility of a recession due to rising inflation that has been compounded by Russia’s invasion of Ukraine and subsequent interest rate increases. Layoffs are already happening in several areas of the banking sector, most notably the mortgage sector, which is especially vulnerable to interest rate increases that harm house sales.

According to Bloomberg, JPMorgan Chase & Co. is this week reassigning hundreds of workers from its home loan division and firing hundreds more. The industry is not yet experiencing widespread hiring freezes or layoffs, the recruiters claimed, although in general. In addition, some smaller companies, such as boutique investment bank Lazard, are trying to seize the opportunity presented by the evolving market to attract top personnel for themselves.

After 2021, which he described as being the most difficult in a decade for staff retention and remuneration, Lazard Chief Executive Kenneth Jacobs claimed that a hiring slowdown was assisting his company in attracting new talent. Jacobs stated last week at a Morgan Stanley conference that “the rivalry for talent is lessening.” “I believe we’ll try to profit from this.”

Equity capital markets have experienced the sharpest reduction in activity; according to Julian Bell is the managing director and head of the Americas for the Sheffield Haworth talent firm. Broker-dealers will suffer more than full-service banks as a result, according to this. According to him, brokers in the main equities capital markets sectors of healthcare/biotech and technology will suffer the most. Investment bankers are not worried about impending layoffs, despite the fact that hiring is decreasing and salary expectations have decreased following an extraordinarily robust payout in 2021.

According to Anthony Keizner, managing partner at Odyssey Search Partners, whose clients include private equity, hedge funds, and investment funds, “they still think they’re relatively understaffed for the deal volumes that they have.” According to him, certain clients are still quite hungry for skill. The car isn’t about to crash, Keizner replied, “maybe the foot is off the gas just a little.”

Read More

Stocks decline as Wall Street’s effort at a rally fails

Stocks decline as Wall Street’s effort at a rally fails

As markets struggled to maintain a recovery from earlier in the day, stocks modestly declined on Wednesday in turbulent trading. Traders also considered remarks made by Federal Reserve Chair Jerome Powell, who reaffirmed the position of the central bank in battling inflation. In the last hour of trade, the Dow Jones Industrial Average fell 47.12 points, or 0.15 percent, to 30,483.13. To 3,759.89, the S&P 500 fell 0.13 percent. To 11,053.08, the NASDAQ Composite dropped 0.15 percent.

Stock prices have recently been affected by growing fears of a Wall Street slump. On Wednesday, Fed Chair Powell testified before Congress that the Fed has the “resolve” to rein in inflation, which has risen to 40-year highs. The Fed chairman told the Senate Banking Committee, “At the Fed, we realise the suffering high inflation is inflicting. “We are acting quickly to bring inflation back down because we are strongly committed to doing so.”

Until it sees “compelling evidence that inflation is heading down,” Powell continued, the Fed will maintain its current trajectory. He added that it has grown “much more difficult” to provide a smooth landing for the economy without one. The Federal Reserve increased interest rates by 0.75 percentage points last week and warned that a similar hike could occur again the following month. Investors were alarmed by the central bank’s previous week change to a more aggressive stance against inflation, fearing that it would prefer a recession to continued high inflation.

Jerome Powell has made it clearly apparent that the Fed will keep raising interest rates until inflation starts to decline because inflation is still the largest risk to financial assets. Robert Schein, chief investment officer at Blanke Schein Wealth Management, wrote that a sustained rally for risk assets is difficult to envision until that time. Till the Fed gives the go-ahead, “tight monetary conditions will continue to be a headwind for financial markets,” Schein said.

This week on Wall Street, anticipation of an impending recession grew. According to evidence showing that consumers are beginning to cut down on spending, Citigroup increased the likelihood of a worldwide recession to 50%. The cumulative probability of recession is now approaching 50%, according to a note from Citigroup. “The experience of history indicates that disinflation generally bears considerable costs for growth,” the paper stated.

According to Goldman Sachs, the risks are “greater and more front-loaded,” making a recession for the American economy more likely. The Fed will feel compelled to respond forcefully to high headline inflation and consumer inflation expectations if energy prices continue to rise, even if activity slows sharply, the firm said in a note to clients. “The main reasons are that our baseline growth path is now lower and that we are increasingly concerned.” In the meantime, UBS stated in a note to clients on Tuesday that while in its base scenario it does not anticipate a U.S. or global recession in 2022 or 2023, “it is obvious that the possibilities of a hard landing are rising.”

Given the robustness of consumer and bank balance sheets, UBS continued, “Even if the economy does enter a recession, it should be a brief one. “Oil prices fell on worries that a weaker economy may reduce fuel consumption, hurting energy equities. With a decline of about 4.2 percent, the sector had the worst performance on the broad-market index. Shares of ConocoPhillips and Marathon Oil fell by around 6.3 percent and 7.2 percent, respectively. Exxon Mobil and Occidental Petroleum had declines of 3.6% and almost 4%, respectively.

Read More

After a recent pullback, US stocks are up 2%

After a recent pullback, US stocks are up 2%

Following a recent selloff, global market indices rose dramatically on Tuesday, with major U.S. stock indexes each closing the day up more than 2%, while the Japanese yen sank to its lowest level since October 1998 against the US dollar. As investors returned from a long weekend, Wall Street gained, with buyers snapping up shares of megacap growth and energy businesses hammered by global economic concerns last week.

With the rise in oil prices, energy stocks have risen as well. Summer fuel demand drove up oil prices. “You’ve pushed the ball under the water deep enough now that we’re getting a bounce,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago, after back-to-back weeks of 5% drops. However, according to Nolte, “Interest rates are continuing to rise. The price of oil continues to rise.” Investors have been on edge due to expectations of interest rate hikes from major central banks and concerns about a worldwide recession. To confront high inflation, central banks are expected to tighten policy.

The Dow Jones Industrial Average increased by 641.47 points, or 2.15 percent, to 30,530.25; the S&P 500 increased by 89.95 points, or 2.45 percent, to 3,764.79; and the NASDAQ Composite increased by 270.95 points, or 2.51 percent, to 11,069.30. The pan-European STOXX 600 index increased 0.35 percent, while MSCI’s global stock index increased 1.83 percent.

The risk-off mindset that dragged on US markets last week has subsided, resulting in higher Treasury yields. Benchmark 10-year rates were at 3.305 percent, up from the previous week’s finish of 3.239 percent. For signals on rates, all eyes are on Fed Chair Jerome Powell’s hearing to the Senate Banking Committee on Wednesday. Goldman Sachs (NYSE:GS) now believes there is a 30% risk that the US economy would enter a recession in the coming year, up from its previous estimate of 15%.

In the foreign exchange market, the Japanese yen fell to 136.330 per dollar against the US dollar. Fumio Kishida, Japan’s prime minister, said the central bank should keep its current ultra-loose monetary policy. This distinguishes it from other major central banks. Brent crude futures increased by 52 cents, or 0.5 percent, to $114.65 a barrel. The July West Texas Intermediate (WTI) crude contract in the United States ended on Tuesday, finishing at $110.65, up $1.09, or 1%. At $109.52, the more active August contract was up $1.53. Gold fell 0.3 percent to $1,832.27 an ounce on the spot market.

Read More
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. 

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More
USD/CHF Gains Momentum Above 0.8550 Ahead of FOMC Minutes

USD/CHF Extends Decline Near 0.8400 as Investors Await US GDP Data

USD/CHF Extends Decline Near 0.8400 as Investors Await US GDP Data

The USD/CHF pair is experiencing selling pressure, trading around 0.8405 during early European hours on Thursday. Dovish comments from US Federal Reserve (Fed) officials continue to weigh on the US Dollar (USD).

At the Fed’s annual Jackson Hole retreat last week, Fed Chair Jerome Powell indicated that “the time has come” for the central bank to consider cutting interest rates. According to the CME FedWatch Tool, markets are fully pricing in a 25 basis point (bps) rate cut for September, with a 36.5% chance of a deeper cut.

Additionally, San Francisco Fed President Mary Daly mentioned on Monday that “the direction of change is down, and the time to adjust is now,” reinforcing expectations for a rate cut in September. Minneapolis Fed President Neel Kashkari also suggested it might be appropriate to start discussing rate cuts as early as September, citing a weakening labor market.

Geopolitical tensions in the Middle East and ongoing economic uncertainties could increase safe-haven demand, benefiting currencies like the Swiss Franc (CHF) against the USD. In a recent escalation, Israel’s military conducted raids and airstrikes across the occupied West Bank, resulting in at least 11 Palestinian deaths, as reported by CNN.

On the economic front, Switzerland’s ZEW Survey Expectations, released by the Centre for European Economic Research on Wednesday, dropped to -3.4% in August from 9.4% previously. Looking ahead, the Swiss KOF Leading Indicator for August is set to be published on Friday. In the US, the second estimate of the Q2 GDP Annualized figure, scheduled for Thursday, is expected to show a 2.8% expansion.

Read More
USD/CAD Rebounds Above 1.3450 as Risk Sentiment

USD/CAD Rebounds Above 1.3450 as Risk Sentiment Worsens Ahead of Fedspeak

USD/CAD Rebounds Above 1.3450 as Risk Sentiment Worsens Ahead of Fedspeak

The USD/CAD pair has regained some ground, trading around 1.3460 during the early European session on Wednesday, breaking a three-day losing streak. This recovery is supported by a modest bounce-back in the US Dollar (USD). Market participants will look for further direction from speeches by Federal Reserve officials Christopher Waller and Raphael Bostic later today.

The cautious sentiment ahead of Nvidia’s earnings report and the upcoming Fedspeak may increase demand for safe-haven assets, benefiting the USD. However, expectations that the Federal Reserve will lower interest rates in September could limit the pair’s upward movement. Markets have already priced in a 25 basis point rate cut for September, with a 34.5% probability of a deeper cut, according to the CME FedWatch Tool. Traders anticipate a total of 100 basis points in Fed easing this year.

San Francisco Fed President Mary Daly suggested on Monday that it might be appropriate for the Fed to start cutting interest rates. Her views align with Fed Chair Jerome Powell’s remarks at the Jackson Hole symposium, where he expressed growing confidence that inflation is heading towards the 2% target, indicating it may be time for policy adjustments.

On the Canadian Dollar (CAD) side, economists predict that the Bank of Canada (BoC) will cut interest rates for a third consecutive time at its September 4 policy meeting, according to a Bloomberg survey. This expectation could weigh on the CAD against the USD. Additionally, lower crude oil prices, which affect the commodity-linked CAD, could further pressure the Canadian Dollar, as Canada is a leading oil exporter to the United States.

Read More
Australian Dollar Advances on Improved Risk Sentiment

Australian Dollar Advances on Improved Risk Sentiment

Australian Dollar Advances on Improved Risk Sentiment

The Australian Dollar (AUD) has moved higher against the US Dollar (USD) on Tuesday, hovering just below the seven-month high of 0.6798 reached on Monday. The downside for the AUD/USD pair appears limited as traders anticipate diverging policy outlooks between the Reserve Bank of Australia (RBA) and the US Federal Reserve (Fed). Market participants are also awaiting the release of the Monthly Consumer Price Index on Wednesday, which could provide further insight into the RBA’s policy direction.

Recent minutes from the RBA meeting revealed that board members believe a rate cut is unlikely in the near term. RBA Governor Michele Bullock reiterated that the central bank remains prepared to raise rates if necessary to combat inflation.

In contrast, Fed Chairman Jerome Powell, speaking at the Jackson Hole Symposium, stated, “The time has come for policy to adjust,” although he did not specify when rate cuts would begin or their potential magnitude. The CME FedWatch Tool indicates that markets are fully pricing in at least a 25 basis point rate cut by the Fed at its September meeting.

Daily Market Movers: Australian Dollar Gains Amid Hawkish RBA

San Francisco Fed President Mary Daly commented on Monday that it is likely time to start cutting interest rates, potentially beginning with a quarter-percentage point reduction. Daly emphasized that if inflation continues to slow and the labor market remains stable, it would make sense to adjust policy gradually.

US economic data showed that Durable Goods Orders surged by 9.9% month-over-month in July, recovering from a 6.9% drop in June and far exceeding the expected 4.0% increase. This marks the largest gain since May 2020.

Philadelphia Fed President Patrick Harker highlighted the importance of a gradual reduction in interest rates, while Chicago Fed President Austan Goolsbee noted that monetary policy is currently highly restrictive, with the Fed now focusing on achieving its employment objectives.

The US Composite PMI slipped slightly to 54.1 in August, down from 54.3 in July, but remained above market expectations of 53.5, indicating ongoing business activity expansion for the 19th consecutive month.

In Australia, the Judo Bank Composite Purchasing Managers Index (PMI) increased to 51.4 in August from 49.9 in July, marking the fastest expansion in three months. This growth was driven by a stronger services sector, even as manufacturing contracted more sharply.

Minutes from the Federal Open Market Committee’s (FOMC) July policy meeting revealed that most Fed officials support cutting the benchmark interest rate in September if inflation continues to moderate.

Tuesday’s RBA Minutes indicated that board members had considered a rate hike earlier in the month but ultimately decided to keep rates unchanged to balance the risks. The consensus among RBA members is that a rate cut is unlikely soon.

Technical Analysis: AUD/USD Remains Below 0.6800

The AUD/USD pair is trading around 0.6770 on Tuesday. Technical analysis of the daily chart shows the pair has breached below its ascending channel, suggesting a potential weakening of the bullish trend. However, the 14-day Relative Strength Index (RSI) remains below the 70 mark, indicating ongoing bullish momentum.

Resistance for the AUD/USD pair is seen at the seven-month high of 0.6798, followed by the lower boundary of the ascending channel at 0.6800. A break above these levels could open the door for further gains toward the upper boundary of the channel at around 0.6940.

On the downside, the pair may find support near the nine-day Exponential Moving Average (EMA) at 0.6726. A break below this level could weaken the bullish bias and pressure the pair toward the 0.6575 support level, followed by additional support at 0.6470.

Read More
USD/CAD Weakens Near

USD/CAD Weakens Near 1.3500 as Fed’s Powell Signals Possible Interest Rate Cut in September

USD/CAD Weakens Near 1.3500 as Fed’s Powell Signals Possible Interest Rate Cut in September

The USD/CAD pair is experiencing selling pressure around the 1.3510 level on Monday during Asian trading hours. The US Dollar (USD) is edging lower after Federal Reserve (Fed) Chair Jerome Powell indicated that the time for interest rate cuts may be approaching, starting this September.

Several Fed officials have delivered dovish comments, reinforcing the likelihood of rate cuts in September, which has put broad pressure on the Greenback in recent sessions. Powell stated, “The time has come for policy to adjust,” and added, “The direction is clear, but the timing and pace of rate cuts will depend on incoming data, the evolving economic outlook, and the balance of risks.”

Additionally, Philadelphia Fed President Patrick Harker has expressed support for two or three rate cuts in 2024, provided there are no significant changes in US economic data. Chicago Fed President Austan Goolsbee mentioned that monetary policy is currently at its most restrictive level, with the Fed now focusing on its employment mandate. According to the CME FedWatch Tool, traders have fully priced in a 25 basis point (bps) rate cut for September, with the odds for a deeper cut rising to 36.5%, up from 24% last week.

In Canada, data from Statistics Canada revealed that Retail Sales fell by 0.3% month-on-month in June, following a 0.8% decline in the previous reading, aligning with market expectations. However, Retail Sales excluding automobiles unexpectedly increased by 0.3% month-on-month in June, surpassing the anticipated 0.2% decline. Market participants are now focusing on the Canadian Gross Domestic Product (GDP) data for the second quarter, due on Friday. The Bank of Canada (BoC) is anticipated to implement an additional 75 basis points (bps) cut by the end of the year.

Read More
BoE Governor Bailey’s Speech

EUR/GBP Slips Below 0.8500 Ahead of BoE Governor Bailey’s Speech

EUR/GBP Slips Below 0.8500 Ahead of BoE Governor Bailey’s Speech

The EUR/GBP pair continues its downward trend, trading near 0.8485 during early European trading hours on Friday. The decrease in expectations for a Bank of England (BoE) interest rate cut in September, following positive Purchasing Managers’ Index (PMI) data, is supporting the Pound Sterling (GBP) and pushing the pair lower. Attention is now on BoE Governor Andrew Bailey’s speech, scheduled for later today.

Recent data showed robust business activity in the UK, marking the strongest growth in four months, coupled with easing price pressures, according to a Thursday survey. S&P Global’s Composite PMI climbed to 53.4 in August from 52.8 in July, slightly exceeding the forecast of 52.9. This upbeat report has reduced market expectations for a BoE rate cut next month, thereby strengthening the GBP against the Euro (EUR). Following the PMI release, financial markets are now pricing in less than a 30% chance of a BoE rate cut in September.

On the Euro side, the European Central Bank (ECB) held interest rates steady at its July meeting but hinted at the possibility of rate cuts later in the year, as indicated in the minutes released on Thursday. Investors are currently betting on a 90% chance of a 25 basis points cut in the deposit rate to 3.5% in September, with expectations of at least one more cut before year-end. This outlook is weighing on the Euro.

Adding to the dovish tone, ECB Governing Council member Martins Kazaks expressed readiness to discuss another rate cut at the upcoming September meeting, citing confidence that inflation will return to the 2% target, despite concerns over the economic outlook.

Read More
EUR/USD Slips Below 1.1150 as Eurozone and US PMI Data Loom

EUR/USD Slips Below 1.1150 as Eurozone and US PMI Data Loom

EUR/USD Slips Below 1.1150 as Eurozone and US PMI Data Loom

The EUR/USD pair is trading with mild losses around 1.1145, breaking its four-day winning streak during the Asian session on Thursday. Despite the current dip, downside risks for the pair appear limited due to strong expectations that the US Federal Reserve (Fed) may begin easing its monetary policy in September. Investors are now turning their attention to the preliminary August Purchasing Managers’ Index (PMI) data from both the Eurozone and the US, scheduled for release later today.

Minutes from the Fed’s July 30-31 meeting, released on Wednesday, indicated that most Fed officials anticipated a potential interest rate cut in September, provided that inflation continues to cool. Atlanta Fed President Raphael Bostic noted, “We might need to shift our policy stance sooner than I would have thought before.”

Fed Chair Jerome Powell’s upcoming speech at Jackson Hole is highly anticipated, with markets expecting him to signal that inflation is on track toward the Fed’s 2% target. Any dovish comments from Powell or other Fed officials could weigh on the US Dollar, potentially providing support for EUR/USD.

On the European side, European Central Bank (ECB) policymakers have refrained from committing to a specific timeline for interest rate cuts, citing expectations that inflation in the Eurozone will remain near current levels through the end of the year. However, ECB policymaker Olli Rehn suggested on Monday that the ECB might need to lower interest rates again in September due to ongoing economic weakness. The markets have already priced in nearly a 90% probability of a 25 basis point cut in the deposit rate to 3.5% in September, with expectations of at least one more reduction before the year concludes.

Read More
EUR/USD Holds Firm Above 1.1100 with Fed Minutes Awaited

EUR/USD Holds Firm Above 1.1100 with Fed Minutes Awaited

EUR/USD Holds Firm Above 1.1100 with Fed Minutes Awaited

EUR/USD is hovering around 1.1130 during Wednesday’s North American session, marking its highest level this year. The currency pair is eyeing a revisit to the 2024 high of 1.1140 as the US Dollar (USD) weakens amid growing optimism for Federal Reserve (Fed) interest rate cuts in September.

The US Dollar Index (DXY), which measures the Greenback’s value against six major currencies, is near a fresh seven-month low, around 101.30.

With inflationary pressures in the United States (US) easing and the labor market cooling, investors are increasingly convinced that the Fed will cut interest rates in September. However, there’s uncertainty about whether this reduction will be significant or gradual. The CME FedWatch tool indicates a 30.5% chance of a 50-basis-point (bps) rate cut, with the remaining majority expecting a 25-bps reduction.

Later today, attention will shift to the Federal Open Market Committee (FOMC) minutes from the July policy meeting, set to be released at 18:00 GMT. During the July meeting, the Fed maintained its key borrowing rates at 5.25%-5.50% for the eighth consecutive time, acknowledging increased risks to both inflation and employment.

This week’s spotlight will be on Fed Chair Jerome Powell’s speech at the Jackson Hole (JH) Symposium on Friday, which is expected to provide new insights into the potential rate cuts in September. In a press conference following July’s policy announcement, Powell stated, “If we were to see inflation moving down more or less in line with expectations, growth remains reasonably strong, and the labor market remains consistent with current conditions, then I think a rate cut could be on the table at the September meeting.”

Market Overview: EUR/USD Steady Ahead of Jackson Hole Symposium

EUR/USD remains above the 1.1100 level, with the Euro (EUR) gaining strength against the US Dollar. The Euro is performing well against its peers, driven by expectations that the European Central Bank (ECB) will take a cautious approach to cutting interest rates.

ECB policymakers have avoided committing to a predetermined path for rate cuts, as inflation in the Eurozone is expected to remain above target throughout the year. Despite this, market participants anticipate another ECB rate cut in September, amid economic challenges in Germany, the Eurozone’s largest economy.

Slower wage growth in Germany during Q2 has provided some relief to ECB officials, boosting optimism for a rate cut in September. Data from the Bundesbank, Germany’s central bank, showed that Negotiated Wages grew by 3.1%, significantly slower than the pace in Q1.

Looking ahead, investors will focus on preliminary Eurozone HCOB Purchasing Managers’ Index (PMI) data for August and Q2 Negotiated Wage Rates, both due on Thursday. The Composite PMI is expected to show minimal improvement, reflecting a continued downturn in manufacturing. A lower reading for the Q2 Negotiated Wage Rate, following a 4.69% increase in Q1, would likely be welcomed by ECB officials.

Technical Analysis: EUR/USD Builds Momentum for a Push to 1.1140

EUR/USD is approaching its year-to-date high of 1.1140 as it gains strength ahead of the FOMC minutes release. The currency pair has gained momentum after breaking out of a channel formation on the daily chart. The upward-sloping 20-day and 50-day Exponential Moving Averages (EMAs), positioned near 1.0970 and 1.0900 respectively, suggest a strong bullish trend.

The 14-day Relative Strength Index (RSI) is in the bullish range of 60.00-80.00, indicating strong upward momentum.

If the Euro bulls successfully breach the December 28, 2023, high of 1.1140, the next target will be the psychological resistance at 1.1200. On the downside, the low from August 15 at 1.0950 will serve as critical support.

Read More
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. 

Read More
Best Forex Broker

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.

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More
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.

Read More

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.

Read More

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.

Read More

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

Read More

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.

Read More

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.

Read More

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/

Read More

Popular Articles

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

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

EUR/USD Drops Toward 1.1700 as US Dollar Strengthens

EUR/USD Drops Toward 1.1700 as US Dollar Strengthens; FOMC Minutes in Spotlight

Forex Trading

Unlocking the Power of Forex Trading: Why Xtreme Markets is Your Ultimate Trading Partner

Commodity currencies

What Are Commodity Currencies? How They Impact Your Forex Trades

AI changing Forex trading?

How is AI changing Forex trading?

Categories

,
,
,

Subscribe Now!