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EUR/USD Drops Toward 1.1700 as US Dollar Strengthens

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

The EUR/USD pair slid to around 1.1705 during Wednesday’s Asian session, weighed down by renewed strength in the US Dollar. The Euro came under pressure following fresh tariff threats from former US President Donald Trump, which unsettled global markets and added to investor caution. 

Trump reignited global trade concerns by proposing a 50% tariff on copper imports and hinted at possible duties on semiconductors and pharmaceuticals. While he mentioned that negotiations with both the European Union and China are progressing well, he also warned that a tariff notice to the EU could be issued within days. This uncertainty has dented risk sentiment, putting the Euro under additional stress. 

Attention now turns to the Federal Reserve’s meeting minutes, due later today. Market participants are hoping for more clarity on the Fed’s rate path, especially amid growing expectations of monetary easing. 

At its June meeting, the Fed held interest rates steady, maintaining the federal funds rate between 4.25% and 4.50%—a level unchanged since December. However, markets are now pricing in a total of 50 basis points in rate cuts by year-end, potentially beginning as early as October. 

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Australian Dollar Gains as Risk Sentiment Improves, RBA Decision in Focus

Australian Dollar Rises Amid Risk-On Sentiment, Focus Shifts to RBA Rate Decision

The Australian Dollar (AUD) continues its third straight session of gains against the US Dollar (USD) on Monday, following US President Donald Trump’s move to postpone the imposition of reciprocal tariffs. A weaker USD following disappointing US retail sales data has further supported the AUD/USD pair, reigniting speculation that the Federal Reserve (Fed) may cut interest rates later this year despite persistent inflation concerns.

Yet, the AUD’s gains could be capped before the Reserve Bank of Australia’s (RBA) policy announcement on Tuesday, as mounting speculation of a cut in interest rates deters sentiment. The RBA is widely expected to lower its Official Cash Rate (OCR) by 25 basis points (bps) to 4.10%, marking the first rate reduction in four years.

US Dollar Under Pressure Amid Lower Treasury Yields

The US Dollar Index (DXY) is down for the third consecutive session, bogged down by weaker US Treasury yields. At the time of writing, the DXY is trading around 106.70, with 2-year and 10-year Treasury bond yields at 4.26% and 4.47%, respectively.

Statistics released by the US Census Bureau on Friday indicated that US Retail Sales decreased 0.9% in January, a reversal from a revised 0.7% rise in December (earlier reported as 0.4%). The decrease was deeper than the market expectation of a 0.1% decline.

Conversely, Core PPI inflation in the US increased to 3.6% YoY in January, above expectations of 3.3%, though marginally less than the revised 3.7% (initially published as 3.5%). This has consolidated expectations that the Fed will push rate cuts until the second part of the year.

The US Consumer Price Index (CPI) rose 3.0% YoY in January, beating expectations of 2.9%, and core CPI (excluding food and energy) went up to 3.3% from 3.2%, beating expectations of 3.1%. On a month-on-month basis, headline inflation rose 0.5% in January compared to 0.4% in December, with core CPI rising to 0.4% from 0.2% in the same period.

Fed Officials Signal a Cautious Approach to Rate Cuts

In his semi-annual report to Congress, Fed Chair Jerome Powell stated that policymakers “do not need to be in a hurry” to cut interest rates, citing a strong labor market and robust economic growth. Powell also warned that Trump’s tariff policies could exert upward pressure on inflation, making it harder for the central bank to lower rates.

A Reuters poll of economists now indicates the Fed will wait until next quarter to cut rates, citing ongoing inflationary concerns. Although previously, some analysts anticipated a March rate cut; the majority now sees at least one rate cut by June, but opinions remain divided.

Federal Reserve Bank of Cleveland President Beth Hammack echoed this sentiment, saying that maintaining rates at current levels for a long time is probably the right thing to do. Hammack added that a patient strategy will enable the Fed to evaluate economic conditions before altering policy.

Australian Dollar Targets Upper Range Near 0.6400

The AUD/USD currency pair quotes at 0.6360 on Monday, with an uptrend in a rising channel formation. This is indicative of a bullish market inclination, which is also complemented by the 14-day Relative Strength Index (RSI) remaining above 50.

On the upside, the pair could test the upper boundary of the ascending channel at 0.6380, followed by the psychological level of 0.6400.

Major levels of support are the nine-day EMA at 0.6310, followed by the 14-day EMA at 0.6294. A fall below these levels may erode short-term momentum, possibly pulling the pair down to the lower boundary of the rising channel at 0.6270.

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Australian Dollar Declines as US Dollar Strengthens Ahead of Jobless Claims

Australian Dollar Declines as US Dollar Holds Gains Ahead of Jobless Claims

The Australian Dollar (AUD) fell against the US Dollar (USD) on Thursday as trade balance data came in below average than expected. Furthermore, risk-off sentiment, fueled by rising US-China trade tensions, weighs on the AUD/USD.

In December, Australia’s trade surplus fell to $5,085 million, falling short of the 7,000 million anticipated and down from $6,792 million the previous year. While exports increased by 1.1% month on month, this was a decrease from November’s 4.2% increase, while imports increased by 5.9% month on month, much more than the previous 1.4% gain.

US-China Trade Tensions Weigh on Australian Dollar

Investors are still focused on the current trade stagnation between the United States and China, Australia’s top trading partner. China replied to the United States’ new 10% tax, which went into force on Tuesday, causing global market concern. Regarding the situation, President Trump announced on Monday that he intends to engage with China within the next 24 hours. However, he cautioned that failure to achieve an agreement might result in “very, very substantial” tariffs.

Meanwhile, China’s Commerce Ministry imposed a 15% tax on US coal and liquefied natural gas (LNG) imports, as well as an additional 10% levy on crude oil, farm equipment, and some autos. As a countermeasure, China has implemented export limits on important minerals such as tungsten, tellurium, ruthenium, and molybdenum, citing national security concerns.

Amid escalating trade tensions, the Financial Times writes that Chinese firms are quickening preparations to relocate production overseas, mainly to the Middle East, in order to reduce tariff impacts. Some exporters are also considering passing on prices to US consumers or expanding into new markets.

US Dollar Holds Firm Amid Mixed Economic Data

The US Dollar Index (DXY), which tracks the greenback’s performance against a basket of six major currencies, remains stable near 107.50, putting further downward pressure on the AUD/USD. The dollar’s resiliency comes after a weaker-than-expected US Services PMI fell to 52.8 in January, below the market forecast of 54.3.

Investors now focus on Friday’s US Nonfarm Payrolls (NFP) data, a key economic indicator that could influence the Federal Reserve’s monetary policy stance.

The dollar fell on Wednesday, following a poor US Services PMI report. The ISM Services PMI fell to 52.8 in January from a revised 54.0 in December, missing the market forecast of 54.3. Looking ahead, traders are anticipating Friday’s US Nonfarm Payrolls (NFP) report, which could influence the Federal Reserve’s future policy moves.

Technical Outlook: AUD/USD Pulls Back From 0.6300, Eyes Key Support

The AUD/USD pair hovers near 0.6280 on Thursday, retreating from the 0.6300 level. However, sustained trading above the nine- and 14-day Exponential Moving Averages (EMAs) suggests short-term bullish momentum remains intact. The 14-day Relative Strength Index (RSI) is also holding above 50, reinforcing the bullish bias.

On the upside, the pair might target 0.6330, its seven-week high from January 24.

Immediate support comes from the nine-day EMA near 0.6254, followed by the 14-day EMA at 0.6249.

A breach below these levels might weaken the bullish structure, potentially sending the pair below 0.6087, its lowest level since April 2020, which was recorded on February 3.

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Australian Dollar Slips as US Tariffs on China Take Effect

Australian Dollar Slips as US Tariffs on China Take Effect

The Australian Dollar (AUD) falls for the seventh consecutive day as the US Dollar (USD) strengthens following President Donald Trump’s 10% tariff on Chinese imports. Market volatility remains high as investors monitor the continuing US-China trade talks. Trump signaled he may speak with Chinese officials within the next 24 hours, warning that if a deal isn’t reached, tariffs on China will be “very, very substantial.”

Trump also announced a 30-day tariff relief for Mexico and Canada after their nations agreed to send 10,000 troops to the US border to battle drug trafficking. This move follows the introduction of 25% tariffs on Mexican and Canadian goods just two days before.

Chinese Exporters Seek Alternatives

According to the Financial Times, Chinese manufacturers are speeding up plans to transfer production offshore in reaction to US tariffs. Some companies are considering relocating to regions such as the Middle East, while others are looking into passing costs on to US customers or entering new markets.

RBA Rate Cut Expectations Weigh on AUD

The AUD faces additional pressure amid growing expectations that the Reserve Bank of Australia (RBA) may cut rates in February. The RBA has maintained the Official Cash Rate (OCR) at 4.35% since November 2023, stressing that inflation must return to its 2%-3% target range before easing policy.

Analysts at Westpac continue to forecast 100 basis points of rate cuts in 2025, with the market pricing in a more conservative outlook. ANZ, CBA, Westpac, and National Australia Bank (NAB) all anticipate a 25-basis-point (bps) cut in February, with NAB recently revising its forecast forward from May.

US Dollar Strengthens Amid Economic Developments

The US Dollar Index (DXY) stabilizes around 108.70 after erasing gains from the previous session. Recent US economic data support the greenback, with ISM Manufacturing PMI rising to 50.9 in January from 49.3 in December, exceeding expectations of 49.8.

Inflation indicators remain in focus as the Fed’s preferred measure, the Personal Consumption Expenditures (PCE) Price Index, rose 0.3% MoM in December, up from 0.1% in November. Annual PCE inflation increased to 2.6%, while core PCE held steady at 2.8% YoY for the third straight month.

Jerome Powell, Chairman of the Federal Reserve, highlighted that further policy adjustments would be required if there was clear evidence of inflation advance or labor market weakness. Separately, Treasury Secretary Scott Bessent recently argued for new uniform taxes on US imports, beginning at 2.5% and progressively increasing—a departure from his previous stance that tariffs cause inflation.

Australian Dollar Technical Analysis

AUD/USD trades around 0.6210 on Tuesday, remaining within a descending channel pattern on the daily chart, signaling a bearish bias. However, the 14-day Relative Strength Index (RSI) is recovering toward the 50 level, suggesting weakening downside momentum. A breakout above the channel, combined with an RSI move above 50, could indicate a shift toward a bullish outlook.

On the downside, the pair may test the descending channel’s lower boundary near 0.6150. A break below this level could drive AUD/USD toward 0.6087, its lowest point since April 2020.

AUD/USD is currently testing its initial resistance, the nine-day Exponential Moving Average (EMA) of 0.6225, which aligns with the channel’s upper limit. A decisive move over this level could fuel bullish optimism.

 

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Japanese Yen Maintains Strong Bullish Momentum

Japanese Yen Maintains Strong Bullish Momentum; USD/JPY Struggles Below 154.50

The Japanese Yen (JPY) continues to strengthen in early European trading on Thursday, pushing USD/JPY further below 154.50 and closer to its one-month low from earlier this week. Market expectations that the Bank of Japan (BoJ) will hike interest rates again by year-end continue to support the JPY. Additionally, a fresh decline in US Treasury bond yields, narrowing the US-Japan yield differential, has further boosted demand for the lower-yielding Yen.

However, concerns over the potential economic impact of US President Donald Trump’s trade policies may limit aggressive JPY buying. Meanwhile, the Federal Reserve’s (Fed) hawkish pause on Wednesday has bolstered the US Dollar (USD), which could provide some support to the USD/JPY pair. Traders are now looking ahead to the European Central Bank (ECB) meeting, which may increase market volatility and drive further demand for the safe-haven Yen. Additionally, the Advance US Q4 GDP report could introduce short-term trading opportunities.

JPY Gains on Hawkish BoJ Sentiment Amid Market Uncertainty

  • Minutes from the BoJ’s December meeting, released Wednesday, indicated discussions on using neutral interest rate estimates to guide future rate hikes.
  • Former BoJ board member Makoto Sakurai stated on Tuesday that steady rate increases remain feasible due to rising wages, sustained inflation, and strong economic growth.
  • The Federal Reserve, as expected, held rates steady after its two-day meeting and signaled no immediate plans for rate cuts.
  • Fed Chair Jerome Powell emphasized a patient stance, stating there is no urgency to adjust policy and reaffirming that rates will stay elevated amid concerns over Trump’s trade policies, which could fuel inflation.
  • The 10-year US Treasury yield has struggled to sustain gains post-FOMC due to uncertainty surrounding the Trump administration’s economic policies.
  • Reports from Asahi newspaper indicate that Japan’s Prime Minister Shigeru Ishiba is finalizing plans for a February 7 meeting with US President Donald Trump in Washington.
  • The ECB’s policy decision later today is expected to introduce further volatility, alongside the Advance US Q4 GDP print.

USD/JPY at Risk of Retesting Monthly Lows Near 153.70

The USD/JPY pair faced renewed selling pressure near the 156.00 level, breaking below the key 155.00 psychological mark, confirming a multi-month ascending channel breakdown. Momentum indicators on the daily chart suggest continued downside movement, making a retest of the 153.70 region—a multi-week low touched on Monday—a strong possibility.

Key resistance levels for a rebound:

  • 155.00 round figure
  • 155.35-155.40 region
  • 156.00 psychological level

Any recovery attempt is likely to face selling pressure near these levels. A sustained break above 156.25 could trigger short-covering, potentially lifting USD/JPY toward 156.70-156.75, with further resistance at 157.00 and 157.60.

For now, the bias remains bearish, with further losses expected if the pair stays below 154.00. Traders will closely watch US data and global central bank policy updates for the next directional move.

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Gold Price Retreats from Multi-Month High Amid USD Recovery

Gold Price Retreats from Multi-Month High Amid USD Recovery

Gold price (XAU/USD) faces selling pressure at the beginning of the week, pulling back from its highest level since late October, near the $2,786 mark touched on Friday. The US Dollar (USD) has staged a modest recovery following its worst weekly performance since November 2023, which has weighed on the precious metal. However, the broader market dynamics remain supportive of a bullish outlook, suggesting potential dip-buying opportunities at lower price levels.

Market Sentiment Dampened by Trade Tensions and Fed Speculation

Risk sentiment has deteriorated due to US President Donald Trump’s recent decision to impose tariffs on all imports from Colombia, reigniting fears of a trade war. Additionally, expectations that the Federal Reserve (Fed) may cut interest rates twice by year-end, combined with a flight to safe-haven assets, have triggered a fresh decline in US Treasury bond yields. This decline could limit aggressive gains in the USD, potentially cushioning the downside for gold, a non-yielding asset.

Gold Under Pressure from USD Recovery, but Downside Remains Limited

The US Dollar Index (DXY), which tracks the USD against a basket of currencies, rose nearly 0.25% on Monday, driven by revived concerns over US trade policies. President Trump ordered 25% emergency tariffs on all Colombian imports following the country’s refusal to accept deported migrants from the US, with a threat to raise tariffs to 50% next week. Moreover, reports suggest that Trump’s advisors are considering imposing 25% tariffs on Mexico and Canada starting February 1.

In a recent update, the White House confirmed that Colombia has agreed to Trump’s demands, including the unrestricted acceptance of deported individuals. Meanwhile, Trump has reiterated his call for immediate interest rate cuts, fueling speculation of further easing by the Federal Reserve in 2025. The resulting decline in US Treasury yields may act as a headwind for the USD, potentially limiting the extent of gold’s pullback.

Traders Eye Economic Data for Further Clues

Market participants will turn their focus to key US economic data, including Durable Goods Orders, the Conference Board’s Consumer Confidence Index, and the Richmond Manufacturing Index, for fresh impetus during the US trading session.

Gold Price Outlook: Support and Resistance Levels

Gold’s recent decline may attract dip-buying near the $2,736 support zone, as the technical setup remains bullish. Any further slide below the $2,750-2,748 range could find solid support near $2,736, with additional key levels at $2,725-2,720. A break below $2,720 could trigger technical selling, pushing prices toward the $2,665-2,662 zone.

On the upside, a sustained move above the $2,772-2,773 resistance could open the door for a retest of the recent peak near $2,786. Further buying momentum beyond the $2,800 psychological level could signal a renewed bullish phase, extending the upward trend

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Gold Price Holds Defensive Below Multi-Month High Amid Risk-On Sentiment

Gold Price Remains Defensive Below Multi-Month High Amid Risk-On Sentiment

Gold price (XAU/USD) came under selling pressure during the Asian session on Thursday, retreating from the multi-month high of $2,763–$2,764 touched the previous day. This decline halts a three-day winning streak. The US Dollar (USD) gained some strength from its recovery off a monthly low, supported by a rebound in US Treasury bond yields, and the upbeat sentiment in equity markets further dampened demand for the safe-haven metal.

Signs of easing inflation in the US have fueled expectations that the Federal Reserve (Fed) might cut interest rates twice this year, creating a potential headwind for US bond yields and the USD. However, ongoing uncertainty surrounding President Donald Trump’s tariff plans, which could increase trade tensions and market volatility, may help limit the downside for gold prices. Traders may remain cautious and wait for sustained selling pressure to confirm that the one-month uptrend has ended.

Risk-On Mood and Modest USD Rebound Cap Gold Gains

The USD steadied above its recent lows amid recovering Treasury yields, adding pressure to gold prices. In addition, easing geopolitical tensions and a lack of concrete details regarding Trump’s tariff policies have maintained a risk-on sentiment, further undermining gold’s appeal.

While Trump’s proposed tariff policies are considered inflationary, which could prompt the Fed to maintain a hawkish stance, markets are still pricing in at least two Fed rate cuts this year. This outlook may limit the upside for US bond yields and the USD, potentially supporting gold in the near term.

Investors are eyeing Trump’s speech at the World Economic Forum for more clarity on tariffs, alongside the release of US Weekly Jobless Claims, which could influence XAU/USD prices. Upcoming central bank rate decisions, including the Bank of Japan’s meeting on Friday and next week’s announcements from the Fed and the European Central Bank, could inject volatility into the market and impact gold prices.

Gold Price Technical Analysis

Key Support Levels:

  • Immediate support is seen near the $2,725–$2,720 zone, a former resistance-turned-support level.
  • Further declines could target the $2,700 mark, with a decisive break paving the way for a move toward the $2,665–$2,662 region.
  • The $2,627–$2,622 confluence, which includes the 100-day EMA and a short-term ascending trendline, will act as a critical pivot point for short-term traders.

Key Resistance Levels:

  • The recent high near $2,763–$2,764 offers the first resistance level.
  • A break above this zone could see gold prices challenge the all-time high around $2,790, reached in October.
  • The $2,800 mark is the next significant resistance, and a break above it would signal a continuation of the well-established uptrend over the past month.

Outlook:

Gold prices remain influenced by risk sentiment, central bank policy expectations, and USD movements. While near-term bearish factors may limit gains, uncertainty around US tariff policies and inflation trends could provide support, making any dips near key technical levels potential opportunities for dip-buying. Traders will remain focused on upcoming economic data and central bank decisions for further direction.

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Chinese Stocks Rally, but Global Funds Remain Skeptical

Chinese Stocks Rally, but Global Funds Remain Skeptical

Chinese Stocks Rally, but Global Funds Remain Skeptical

Chinese stocks have potentially reached their lowest point, yet there remains a significant hesitation among money managers to reengage fully with the market. The MSCI China Index has seen a 27% rise since its January low, primarily driven by a shift towards undervalued stocks. However, this increase in value hasn’t yet been backed by convincing Chinese corporate earnings, according to insights from Lombard Odier, Pictet Asset Management, and Fidelity International. Despite some optimistic views, such as those from abrdn plc emphasizing the importance of profit gains, the broader investment sentiment remains cautious.

At a glance, Chinese equities haven’t looked this appealing in some time, with major indices entering bull markets bolstered by supportive policies, and long-only funds ceasing to cut positions. However, persistent economic uncertainties and ongoing strategic tensions with the US have diminished the appeal of Chinese stocks as a staple in emerging-market portfolios. John Woods, Chief Investment Officer for Asia at Lombard Odier, notes that tactical plays on short-lived rallies are less preferred than a focus on earnings and fundamentals.

The recent rally, starting in April, took many by surprise, including analysts from Goldman Sachs Group Inc., who noted a widespread fear of missing out among traders. To date, Chinese stocks have regained about $2.5 trillion in market value, recuperating over one third of the losses from a historic downturn earlier this year. This recovery is partly due to a rotation from markets like the US, Japan, and India, where stocks are peaking, towards the relatively low valuations in China, marking the longest stretch of net purchases via Hong Kong trading links in a year.

David Mudd, founder and CIO of PegasusAsia, a hedge fund, predicts a continued shift towards Chinese tech firms from their US counterparts, setting the stage for potential divergences and intriguing trading pairs. The MSCI China Index currently trades at 10 times forward earnings, significantly below both its five-year average and the 20.6 times earnings of the S&P 500.

Nicholas Yeo, head of China equities at abrdn, describes the recent market surge as a technical rebound due to historically low valuations, emphasizing that its sustainability will hinge on forthcoming earnings reports. In contrast, John Lin from AllianceBernstein expresses skepticism, pointing out that the current earnings growth expectations for Chinese stocks, around 10%, may be overly optimistic without supporting corporate performance.As the earnings season progresses, companies within the MSCI China Index have reported a nearly 30% drop in net profits before exceptional items as of mid-May. The upcoming earnings reports from tech giants like Tencent Holdings Ltd. and Alibaba Group Holding Ltd. are highly anticipated, as they could be pivotal in determining the rally’s durability.

Additional momentum for the rally comes from signs of increased policy support in Beijing, especially measures aimed at addressing the stagnant property sector. Simultaneously, the persistent high policy rates in the US make Chinese stocks an attractive alternative, particularly in the tech sector. The Golden Dragon Index, which tracks US-listed Chinese firms, recently experienced a notable rise, fueled by robust quarterly results from Tencent Music Entertainment Group.

Despite the tempting market conditions, Luca Paolini from Pictet remains cautious, opting for tactical investments in China. Morgan Stanley’s strategists, including Laura Wang, advise against chasing the rally, although they recognize specific opportunities. As Beijing encourages companies to enhance dividends and buybacks, and incentivizes key industries like semiconductors, Chinese equities are gradually becoming attractive to value-focused investors, as noted by George Efstathopoulos from Fidelity. However, the critical determinant remains the improvement in consumer sentiment within China, a factor that is still considered fragile.

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Hong Kong Attempts to Attract Saudi Investment to Revitalize Stock Market

Hong Kong Attempts to Attract Saudi Investment to Revitalize Stock Market

Hong Kong Attempts to Attract Saudi Investment to Revitalize Stock Market

Hong Kong is actively seeking investment from Saudi Arabia to help rejuvenate its stock market, which has been facing multiple challenges. The city, known for its role as a global financial hub, is collaborating with the Saudi Tadawul Group to host a conference aimed at attracting fresh stock listings and fund inflows. This comes at a crucial time when Hong Kong needs to bolster its financial status.

The upcoming forum is not only an opportunity for Hong Kong but also for Saudi company officials who are keen on increasing their exposure to Asian markets. According to industry analysts, there is a significant political push fostering closer relations between China, including Hong Kong, and Gulf countries. Chinese businesses have expressed a keen interest in the Middle East, looking for new investment avenues to explore in the region.

This strategic conference highlights Hong Kong Exchanges & Clearing Ltd.’s efforts to attract new investors as part of its broader strategy to diversify its investor base amid reduced interest from U.S. and European investors due to rising geopolitical tensions. 

Last month, the nation’s securities regulator announced initiatives to encourage more companies to launch initial public offerings (IPOs) in Hong Kong, amidst a challenging period marked by a slow Chinese economy and increasing tensions between Beijing and Washington. These factors have led to a decline in investor interest and a significant drop in funds raised through IPOs, reaching a low not seen since 2009.

Bonnie Chan, CEO of Hong Kong Exchanges & Clearing, remains optimistic about the resurgence of significant IPOs in the city, with 100 applications currently in the pipeline and more expected. The recent uptick in applications has provided a hopeful outlook for the market’s recovery.

On the other side, Saudi Arabia sees clear benefits in tightening relations with China. Under the kingdom’s Vision 2030 agenda, spearheaded by Crown Prince Mohammed bin Salman, Saudi Arabia aims to increase foreign ownership and enhance liquidity in its stock markets. The Saudi market has shown robust growth, with the market capitalization increasing by 11% over the past three years, contrasting sharply with Hong Kong’s 25% decline. The Riyadh stock exchange has consistently performed well, attracting significant foreign investment, particularly after its inclusion in MSCI Inc.’s emerging-markets equities benchmark in 2019.

Recently, Hong Kong introduced the CSOP Saudi Arabia ETF, the first such exchange-traded fund in Asia, allowing investors to tap into the Saudi market. Despite a strong start with backing from Saudi Arabia’s sovereign wealth fund, it has seen modest fund inflows. Efforts are underway to cross-list this ETF in Shanghai to enhance accessibility for Chinese investors, who are increasingly recognizing the investment potential in the Middle East.

Further strengthening the ties, Hong Kong and Saudi Arabia have commenced negotiations on an “investment promotion and protection agreement.” There are also plans to launch a Riyadh-based ETF that tracks Hong Kong stock indexes. These initiatives underline the enduring partnership and mutual financial interests between the two regions.

Hong Kong’s Chief Executive John Lee has also expressed aspirations to attract a dual listing from Saudi Aramco, the world’s top oil producer, in Hong Kong. While this remains a future possibility, it signifies the city’s ambition to enhance its stature as a leading financial exchange.

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Asian Stocks Rise Slightly as Hopes for Federal Reserve Action Boost Sentiment

Asian Stocks Rise Slightly as Hopes for Federal Reserve Action Boost Sentiment

Asian Stocks Rise Slightly as Hopes for Federal Reserve Action Boost Sentiment

Asian stock markets achieved modest gains on Tuesday, driven by rising optimism that the Federal Reserve may initiate interest rate cuts within the year. This sentiment mirrored the uptick on Wall Street, sparked by soft U.S. employment figures which fueled speculation about potential changes in Fed policy. The optimism extended across major Asian markets, particularly in Japan, Korea, and Australia, contributing to the longest streak of gains in the region since February.

In Japan, the Nikkei 225 surged by as much as 1.6% as Tokyo investors returned from a holiday, showing robust trading activity. However, markets in Hong Kong and Shanghai experienced fluctuations, alternating between losses and gains throughout the trading day. The Japanese yen weakened following comments from Japan’s top currency official, Masato Kanda, who indicated that there was no immediate need for government intervention in currency markets as long as they remained functional.

The global equity landscape has been positively influenced by adjustments in investor expectations regarding the Federal Reserve’s monetary policy, especially after the recent U.S. jobs data suggested a less robust labor market. Chinese stocks, in particular, saw an uplift from assurances by China’s leaders to introduce new measures aimed at addressing the lingering issues in the housing sector.

Investment analysts highlight Asia’s attractive prospects in terms of growth, earnings potential, and valuation compared to the U.S. According to Ray Sharma-Ong of abrdn Plc, Asian markets have historically outperformed during periods of Fed monetary easing, thanks to better growth dynamics and attractive currency yields.

In the bond markets, there has been a cautious but noticeable shift towards expecting Fed easing this year, influenced by signs of cooling in the U.S. labor market. The yield on U.S. 10-year Treasuries showed little change, mirroring a stable yield environment in Australia as well.

Statements from Federal Reserve officials have underscored this cautious approach. Thomas Barkin, President of the Fed Bank of Richmond, noted that sustained high interest rates are likely to further slow economic growth and help bring inflation down to the 2% target. His counterpart in New York, John Williams, mentioned that rate cuts are anticipated eventually, but the timing would hinge on a broader array of economic data.

Meanwhile, the Reserve Bank of Australia held interest rates steady at a 12-year peak, indicating it would take time before inflation consistently met its target range. In China, positive sentiments were further buoyed as Shenzhen and other major cities relaxed home buying restrictions, part of broader efforts to rejuvenate the struggling real estate sector.

Strategists at HSBC Holdings, including Herald van der Linde, suggest that Chinese markets are poised to remain attractive in the short term due to an undervalued yen, high investment in Japanese funds, and ongoing improvements in China’s regulatory and economic environment. They predict that any Fed easing in late 2024 would likely benefit mainland China more than Japan, pointing to a continued shift in regional market dynamics.

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Asian Stocks Rise Post-Fed Decision; Yen Declines Resume

Asian Stocks Rise Post-Fed Decision; Yen Declines Resume

Asian Stocks Rise Post-Fed Decision; Yen Declines Resume

Most Asian stocks rose following comments from Federal Reserve Chair Jerome Powell, which tempered expectations for further interest-rate hikes. Meanwhile, the yen weakened after briefly surging, indicating possible intervention.

In market movements, equity indexes in Australia and Hong Kong saw gains, while Japanese stocks remained stable. U.S. stock futures experienced a rally, contrasting with a dip in European contracts. Market focus now shifts to forthcoming economic indicators, including euro-area manufacturing data and Apple Inc.’s earnings report.

The yen’s decline by as much as 1.1% against the dollar, following a sharp rise in New York, suggests doubts about Japan’s ability to counter further weakening despite its significant interest-rate gap with the U.S. Japan’s chief currency officer, Masato Kanda, refrained from commenting on potential market interventions.

The Federal Reserve maintained the federal funds rate at 5.25% to 5.5%. Powell indicated that a rate hike is unlikely without clear signs that current policies are insufficient to achieve a 2% inflation target. This stance suggests a cautious approach towards monetary policy, aimed at managing persistent inflation pressures.

On the currency front, the Bloomberg dollar index fell for a second consecutive day, influenced by lower U.S. yields post-Fed announcement. The euro remained steady after a slight increase the previous day.

Corporate earnings also highlighted market dynamics. ArcelorMittal SA reported better-than-expected results, and Apple’s upcoming earnings will provide insights into its performance amid a slowdown in China.

John Woods of Lombard Odier commented on the resilience seen in earnings, emphasizing the predominance of U.S. narratives in the current market environment.

Additional economic insights are expected with the release of April’s non-farm payroll data, with forecasts suggesting a stable unemployment rate of 3.8%. This could indicate persistent robust hiring trends, potentially challenging the Fed’s moderation efforts.

In commodities, oil prices bounced back from prior losses driven by concerns over demand and high U.S. crude inventories. Gold prices increased, supported by the Fed’s indication of a potential shift towards reducing borrowing costs once confident in the easing of inflation.

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Japan Drives Asian Stocks Up, China PMI Steady

Japan Drives Asian Stocks Up, China PMI Steady

Asian stock markets saw gains on Tuesday, with Japan taking the lead, as recent Chinese economic data indicated sustained recovery in the world’s second-largest economy. Japanese and Hong Kong indices climbed, while Chinese mainland shares showed mixed responses after reports of continued growth in factory activities. Meanwhile, U.S. stock futures remained stable following a robust earnings kickoff on Wall Street, despite expectations of sustained high interest rates by the Federal Reserve.

In Japan, equities rose sharply after a national holiday, buoyed by a strong rebound in the yen from a 34-year low against the dollar, amid rumors of government intervention to stabilize the currency. The yen experienced significant volatility, swinging over 2% after a previous drop to 160.17 per dollar, marking the broadest range since late 2022. During Asian trading hours, the yen’s gains moderated slightly as the U.S. dollar strengthened.

Analysts note a cautious optimism surrounding the Japanese currency, as fears of its continued depreciation seem to have eased. Elsewhere in Asia, there’s speculation that China might consider a drastic step to boost its sluggish economy, such as a substantial devaluation of the yuan. Chinese markets are set to close later in the week for the Labor Day holidays.

On the corporate front, Samsung Electronics saw a notable increase in earnings, driven by profits in its semiconductor unit for the first time since 2022, highlighting the surge in global AI development. Shares of Sumitomo Corp. also soared following reports that Elliott Management Corp. had acquired a significant stake in the company. Meanwhile, HSBC announced a decline in its first-quarter pretax profit and the upcoming retirement of its CEO, Noel Quinn, sparking a search for his successor.

In the U.S., early earnings reports are surpassing expectations with a significant majority of companies outperforming initial estimates. This has led to an upward revision in expected earnings growth, boosting investor sentiment. U.S. Treasury yields stabilized after a slight drop, and bond yields in Australia and New Zealand fell.

Market analysts anticipate continued volatility in U.S. markets but remain optimistic, particularly for AI-driven sectors. They recommend a balanced investment approach, emphasizing the potential in U.S. equities, especially technology stocks.

In commodities, oil prices steadied after a notable drop, as peace talks in the Middle East lowered risk premiums. Gold is on track to rise for the third consecutive month, with investors closely watching the upcoming Federal Reserve meeting.

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Apple’s Market Lead in China Slips as Q1 Shipments Drop 6.6%

Apple’s Market Lead in China Slips as Q1 Shipments Drop 6.6%

Apple has been dethroned as the leading smartphone seller in China during the first quarter of 2024, according to preliminary data released by research firm IDC on Thursday. The company saw its smartphone shipments decline by 6.6% compared to the same period last year, amidst fierce competition that has reshaped the market dynamics.

In a closely contested race for market dominance, both Honor and Huawei have now edged out Apple. Honor experienced a rise in market share to 17.1%, while Huawei closely followed with a 17% share. Apple’s market share, in contrast, has slipped to 15.6%. IDC identifies a statistical tie in market share when the difference between companies is 0.1% or less, underscoring just how tight the competition has become.

This shift comes despite Apple’s attempts to regain traction through price promotions during the quarter. Arthur Guo, a senior research analyst at IDC China, noted in the report that these efforts were insufficient to counter the robust challenge posed by Android-based competitors.

Adding to Apple’s challenges, the overall smartphone market in China is on the rise, with total shipments increasing by 6.5% to reach 69.3 million units, as reported by IDC. This growth suggests a recovering market where competition is becoming increasingly stiff.

Further emphasizing the scale of Apple’s current predicament, another research firm, Counterpoint, revealed that Apple’s smartphone shipments in China plummeted by 19% in the first quarter. This marks the company’s poorest performance since 2020, indicating significant hurdles in one of its key markets.

The increasing market share of rivals like Honor and Huawei is indicative of a broader trend where Chinese consumers are responding more favorably to domestic brands, which have been aggressively innovating and marketing their products. As these brands continue to capitalize on national sentiment and technological advancements, Apple faces the dual challenge of adjusting its strategy to regain lost ground and redefining its value proposition to appeal to Chinese consumers amidst a rapidly evolving smartphone landscape.

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UBS Upgrades Chinese Stocks to Overweight

UBS Upgrades Chinese Stocks to Overweight

UBS Group AG has upgraded its rating for a prominent Chinese stock index to overweight, indicating a renewed confidence in the market’s recovery prospects. This upgrade, described as a rare and optimistic move in 2024, reflects UBS’s positive stance on the financial health and earnings potential of China’s largest stocks.

In a detailed analysis released on Tuesday, UBS strategists, including Sunil Tirumalai, highlighted the robust earnings and solid fundamentals of these top companies. They pointed to a noticeable increase in consumer spending and a potential shift in household savings towards market investments as key drivers of this optimism.

The timing of UBS’s bullish outlook on the MSCI China Index coincides with the market showing signs of recovery from a prolonged downturn. The index, along with corporate performance, has begun to improve, buoyed by economic upturns and a tentative easing of corporate struggles. Despite this, the shadow of geopolitical strife and regulatory uncertainties continues to temper investor enthusiasm, preventing a full-scale commitment to this asset class.

Simultaneously, UBS has adjusted its views on other Asian markets, upgrading Hong Kong stocks to overweight while downgrading Taiwan and South Korea’s tech-centric markets to neutral. This shift reflects a broader strategy of divesting from highly valued tech stocks amid expectations of sustained high interest rates by the Federal Reserve.

Year-to-date, the MSCI China Index has risen over 13% from its January low, with similar gains seen in the Hang Seng Index. This growth comes after a cautious period among brokerages who were hesitant to amend their market forecasts following a volatile market phase post-2022’s aggressive rally.

Historically, UBS had moved Chinese stocks to a neutral stance in late 2023, mirroring actions by Morgan Stanley, as it awaited economic stabilization and policy interventions. Recent data, however, shows a rebound in the 12-month forward earnings estimate for the MSCI China Index by 1.7%, the first rise since a dip at 2022’s end.

This positive trend in Chinese equities is further supported by national policies aimed at stabilizing the market and enhancing corporate governance, as outlined in China’s recent “Nine-Point Guideline.” These initiatives are expected to foster better dividend practices and higher quality stock offerings.

Nonetheless, UBS warns that the looming US elections could escalate geopolitical tensions, posing a significant risk to the ongoing recovery in Chinese stocks. This backdrop of uncertainty makes the current market landscape both promising and precarious as investors navigate these complex dynamics.

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WTI Trades with Modest Losses Below $77.00, Downside Potential Limited

WTI Trades with Modest Losses Below $77.00, Downside Potential Limited

WTI Trades with Modest Losses Below $77.00, Downside Potential Limited

West Texas Intermediate (WTI) crude oil prices are struggling to build on the previous day’s rebound from weekly lows, trading with a slight negative bias during the Asian session on Friday. The commodity is currently around the $76.70 mark, down 0.25% for the day, but remains poised for modest gains for the second consecutive week.
The risk of supply disruptions remains high due to escalating tensions in the Middle East. Additionally, strong US macroeconomic data released on Thursday has eased concerns about a downturn in the world’s largest economy. This, coupled with expectations that potential rate cuts by the Federal Reserve (Fed) could stimulate economic activity and increase fuel consumption, may continue to support crude oil prices.

Meanwhile, the US Dollar (USD) is struggling to maintain the positive momentum it gained after the previous day’s data, amid speculation that the Fed might begin its rate-cutting cycle in September. The prevailing risk-on sentiment is also weighing on the safe-haven Greenback, which typically boosts demand for USD-denominated commodities like crude oil.

However, investor concerns about an economic slowdown in China, the world’s largest oil importer, persist. This is compounded by recent downgrades in oil demand growth forecasts for 2024 from both OPEC and the IEA. Additionally, an unexpected build in US oil inventories, indicating a potential cooling in demand, is acting as a headwind for crude oil prices, exerting downward pressure as the week comes to a close.

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Oil Retreats as Markets Shift Focus

Oil Retreats as Markets Shift Focus to Demand Concerns

Oil Retreats as Markets Shift Focus to Demand Concerns

Oil prices declined on Tuesday, ending a five-day rally as the market shifted its focus back to concerns over demand, following OPEC’s recent downward revision of its 2024 demand growth forecast due to weaker expectations in China.

Global benchmark Brent crude futures dropped by 57 cents, or 0.7%, to $81.73 a barrel at 0630 GMT. Similarly, U.S. West Texas Intermediate (WTI) crude futures fell 48 cents, or 0.6%, to $79.58 a barrel.

On Monday, Brent crude had surged by more than 3%, while U.S. crude futures had risen over 4%.
The Organization of the Petroleum Exporting Countries (OPEC) revised its global demand forecast for 2024 downward for the first time since July 2023, citing weaker demand indicators from China, including declining diesel consumption and a slowing property sector in the world’s second-largest economy. This revision poses a challenge for the broader OPEC+ group, which is set to increase production starting in October.

“Demand concerns for crude oil remain a significant factor,” said Yeap Jun Rong, a market strategist at IG. He noted that apprehensions persist ahead of upcoming U.S. inflation data, adding that any indication of rising economic risks could further pressure oil prices. With OPEC+ scaling back production cuts and reducing their demand forecast for 2024, there may be signs of a less constrained oil market in the near future.

Geopolitical tensions, however, continue to keep investors on edge. The situation in the Middle East has intensified, with the U.S. warning of potential significant attacks by Iran or its proxies in the region as early as this week. White House national security spokesperson John Kirby highlighted the possibility of such events on Monday. Any escalation could disrupt global crude supplies and drive prices higher. Analysts also pointed out that an attack could prompt the U.S. to impose embargoes on Iranian crude exports, potentially impacting 1.5 million barrels per day of supply.

Markets are also bracing for the release of the U.S. consumer price index (CPI) report on Wednesday, which is expected to provide crucial insights into inflation trends. Investors are concerned that a significantly lower CPI reading could amplify fears of an economic downturn. According to the CME’s FedWatch Tool, money markets are currently evenly split on the likelihood of a 25 or 50 basis point rate cut by the U.S. Federal Reserve in September, with expectations of a total easing of 100 basis points by the end of 2024. Rate cuts typically boost economic activity, leading to increased demand for energy sources like oil.

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Gold Price Near Two-Week High Amid Upbeat Market Mood

Gold Price Near Two-Week High Amid Upbeat Market Mood

Gold Price Near Two-Week High Amid Upbeat Market Mood

During the Asian session on Thursday, the gold price (XAU/USD) maintained a positive bias and remained just below the nearly two-week high reached the previous day. However, the strong bullish sentiment across global equity markets acted as a headwind for the safe-haven precious metal, particularly amid the relatively thin liquidity caused by the Independence Day holiday in the US. Traders appeared cautious and preferred to wait for the release of the closely-watched US Nonfarm Payrolls (NFP) report on Friday before making new directional bets.

Despite this, the near-term outlook for gold seems favorable for bullish traders. There is a growing consensus that the Federal Reserve (Fed) will begin cutting interest rates this year, which should support the non-yielding gold price. This sentiment is reinforced by softer US macroeconomic data published on Wednesday and the minutes from the last Federal Open Market Committee (FOMC) meeting. The minutes revealed that most policymakers believe US economic growth is gradually cooling. This has strengthened the expectation that the Fed will lower borrowing costs in September and December, keeping the US Dollar (USD) bulls on the defensive and lending support to gold.

In addition to these factors, persistent geopolitical risks continue to validate the positive outlook for gold. Ongoing conflicts in the Middle East, the prolonged Russia-Ukraine war, and political uncertainty in the US and Europe all contribute to the demand for safe-haven assets like gold. Furthermore, the overnight breakout through the 50-day Simple Moving Average (SMA) indicates that the path of least resistance for XAU/USD is to the upside.

The anticipation of the NFP report has made traders cautious, but the broader market sentiment leans towards a bullish trend for gold. Should the US employment data support the view of a slowing economy, it could further solidify expectations of Fed rate cuts, providing additional upward momentum for gold.

In summary, while global equity market strength and cautious trading ahead of the NFP report may limit immediate gains, the overall outlook for gold remains positive. The combination of anticipated Fed rate cuts, ongoing geopolitical tensions, and technical indicators suggests that the gold price is likely to continue its upward trajectory in the near term.

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Gold Holds Steady Below 50-Day SMA, Awaits Fed Chair Powell's Speech

Gold Holds Steady Below 50-Day SMA, Awaits Fed Chair Powell’s Speech

Gold Holds Steady Below 50-Day SMA, Awaits Fed Chair Powell’s Speech

Gold prices (XAU/USD) faced fresh selling pressure during the Asian session on Tuesday, reversing the previous day’s gains and approaching the 50-day Simple Moving Average (SMA), a significant resistance level. The US Dollar (USD) gained traction as investors awaited more clarity on the Federal Reserve’s (Fed) rate-cut path, contributing to the downward pressure on gold. Additionally, a generally positive tone in the equity markets diverted flows away from the safe-haven precious metal.

Markets are increasingly pricing in the possibility of the Fed lowering borrowing costs in September and again in December. This expectation was bolstered by the US ISM PMI report released on Monday, which indicated that the manufacturing sector contracted for the third consecutive month in June. Prices paid by factories for inputs also dropped to a six-month low. Despite this, retreating US Treasury bond yields might limit the USD’s gains, potentially offering some support to gold prices. Furthermore, China’s economic challenges, geopolitical risks, and political uncertainty could also lend support to the precious metal.

Traders are likely to adopt a cautious stance ahead of Fed Chair Jerome Powell’s speech later on Tuesday and the release of the FOMC meeting minutes on Wednesday. These events are expected to provide further insights into the Fed’s future policy direction. Additionally, the closely-watched US Nonfarm Payrolls (NFP) report, due on Friday, will be critical in shaping expectations about the Fed’s next moves. The outcome of these key events will significantly influence market sentiment towards the USD and help determine the next directional move for gold prices.

In summary, gold prices are currently under pressure due to a stronger USD and positive equity market sentiment. However, the potential for future Fed rate cuts, economic uncertainties in China, and geopolitical risks could provide some support. Traders are closely monitoring upcoming speeches and reports for further guidance on the Fed’s policy, which will play a crucial role in the near-term outlook for gold prices.

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WTI Drops Toward

WTI Falls Below $80 on Unexpected US Crude Stockpile Increase

WTI Falls Below $80 on Unexpected US Crude Stockpile Increase

West Texas Intermediate (WTI) crude oil prices edged lower to around $80.30 during the Asian session on Thursday, retreating further from a two-month high of $81.65. This decline was primarily driven by a surprise increase in US crude stockpiles, which raised concerns about weakening demand in the world’s top oil consumer.

On Wednesday, data from the US Energy Information Administration revealed that US crude oil stockpiles rose by 3.591 million barrels for the week ending June 21. This increase was contrary to market expectations, which had anticipated a 3.000 million-barrel decline. The unexpected build in inventories has put downward pressure on oil prices, signaling potential issues with demand.

Adding to the complexity, ongoing geopolitical tensions in the Middle East and Ukraine have the potential to influence oil prices further. Israeli Prime Minister Benjamin Netanyahu announced that the most “intense” phase of the attack against Hamas in Gaza is nearing its end. Meanwhile, Russia condemned the US for a “barbaric” strike in Crimea, which utilized US-provided missiles. This attack resulted in the deaths of at least four people, including children, and injured 151 others. Such geopolitical conflicts can lead to supply disruptions, which typically drive oil prices higher, but current market conditions are dominated by the inventory build.

In a contrasting development, US crude oil imports surged last month to their highest level in nearly two years. Refiners have been acquiring heavy crudes from Canada and Latin America to produce fuels for the summer driving season. In May, US crude oil imports reached 3.1 million barrels per day (bpd), the highest since July 2022, according to ship tracking service Kpler. This trend has continued into June, with imports averaging around 2.9 million bpd, as reported by Reuters.

Despite the geopolitical tensions and increased imports, the immediate focus remains on the unexpected rise in US crude stockpiles, which suggests potential softness in demand. This scenario has led to a cautious outlook in the market, with traders and analysts closely monitoring inventory levels and geopolitical developments for future price movements.

In summary, WTI crude oil prices have softened due to an unexpected build in US crude inventories, overshadowing geopolitical tensions and robust import levels. The market remains vigilant, assessing how these factors will balance out in the coming weeks.

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Gold Price Dips Amid Cautious Federal Reserve Comments

Gold Price Dips Amid Cautious Federal Reserve Comments

Gold Price Dips Amid Cautious Federal Reserve Comments

Gold prices (XAU/USD) are seeing a rise in Tuesday’s trading, maintaining a positive trajectory despite a downtrend in the U.S. dollar. This uplift in gold is somewhat constrained by recent remarks from Federal Reserve (Fed) officials. After last week’s stronger-than-expected U.S. Purchasing Managers Index (PMI), Fed policymakers have indicated a delay in anticipated interest rate cuts for the year, putting pressure on gold’s potential gains. However, the precious metal may find support from increased safe-haven demand amid escalating geopolitical tensions in the Middle East and Ukraine, which could drive its value up in the near term.

Investor attention is set to focus on upcoming speeches by Fed members. Both Lisa Cook and Michelle Bowman are slated to address the public on Tuesday, and their comments are eagerly awaited for indications of the Fed’s future monetary policy direction. This week is also significant for U.S. economic data, with the final reading of the U.S. Gross Domestic Product (GDP) for the first quarter (Q1) due on Thursday, followed by the Personal Consumption Expenditure (PCE) Price Index for May, scheduled for release on Friday. These data points are crucial as they provide insights into the economic health of the nation.

Any signs from these economic releases that suggest a slowing of inflation could alter market expectations, potentially leading to predictions of Fed rate cuts later in 2024. Such developments would likely weaken the U.S. dollar, subsequently providing a boost to USD-denominated gold. As markets digest these economic indicators and Fed communications, the trajectory of gold prices will depend heavily on the interplay between U.S. monetary policy expectations and global geopolitical dynamics. Investors will need to stay tuned to these key economic events and policy signals to gauge the future direction of gold prices effectively.

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Australian Dollar Dips Amid Renewed

Australian Dollar Dips Amid Renewed US Dollar Demand

Australian Dollar Dips Amid Renewed US Dollar Demand

On Thursday, the Australian Dollar (AUD) experienced losses, trading in negative territory. Despite this, the currency’s downside may be limited due to the hawkish stance taken by the Reserve Bank of Australia (RBA) during its June meeting earlier this week. The RBA’s firm approach suggests that they are not ready to ease monetary policy soon, which could provide some support for the AUD.

Contributing to the dynamics between the AUD and USD is the recent weaker-than-expected US Retail Sales data. This data has fueled speculation that the US Federal Reserve (Fed) might consider rate cuts later this year, potentially weakening the Greenback and benefiting the AUD/USD pair. The anticipation of lower US interest rates could create a supportive environment for the Australian Dollar, as investors might seek higher returns elsewhere.

However, the RBA’s statement also highlighted the uncertainties in the economic outlook. The central bank acknowledged that the journey to bring inflation down to its target would not be straightforward. This acknowledgment of economic challenges suggests that the RBA remains cautious about the future, which might temper some of the positive impacts on the AUD.

Traders are also closely watching the upcoming preliminary data for Australia’s Judo Bank Purchasing Managers Index (PMI) for May, set to be released on Friday. This PMI data will provide insights into the health of the Australian economy. Any indications of recovery or improvement in the PMI could influence the RBA’s decisions regarding future rate cuts. A stronger-than-expected PMI might prompt the RBA to hold off on reducing rates, which could, in turn, bolster the Australian Dollar against the US Dollar.

In summary, while the Australian Dollar faces some pressure, the RBA’s hawkish stance and the potential for US Fed rate cuts provide a mixed outlook. The upcoming PMI data will be crucial for traders, as it will offer further direction on the economic trajectory and the RBA’s monetary policy decisions. The interplay of these factors will continue to shape the AUD/USD pair’s performance in the near term.

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EUR/USD Price Forecast

EUR/USD Price Forecast: Consolidating Below 1.0500 Amid Multi-Week High

The EUR/USD currency pair is having a hard time continuing its recent winning streak, trading in a tight range just below the 1.0500 psychological mark during the Asian session on Monday. In spite of the consolidation, the pair is still close to its three-week high of Friday, buoyed by a weaker US Dollar (USD).

Technically, the pair‘s location above the 38.2% Fibonacci retracement level of the November-January bear run, combined with upbeat oscillators on the daily chart, indicates that the bullish momentum is still intact. This leaves room for a potential rally towards the 1.0545-1.0555 resistance area, which coincides with the 50% Fibonacci retracement level and the 100-day Exponential Moving Average (EMA).

A successful breach above this crucial barrier may set the stage for additional gains, with EUR/USD potentially challenging the 1.0600 level. A break above this level may propel the pair towards the December 2024 swing high of 1.0630, close to the 61.8% Fibonacci retracement level. Further bullish momentum may continue to drive the rebound from its more than two-year low in January.

To the contrary, however, the 38.2% Fibonacci level of 1.0465 acts as an instant support level. A resolute breach through this area can drive selling momentum faster, pulling the pair towards the 1.0400 round number and down further into the mid-1.0300s (23.6% Fibonacci level). Failure to hold these levels could shift the bias in favor of bearish traders, potentially exposing the 1.0200 handle.

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EUR/USD Eases Near

EUR/USD Eases Near 1.0300 Ahead of Lagarde’s Speech

The EUR/USD pair edges lower to approximately 1.0310 during the Asian session on Monday, weighed down by a stronger US Dollar (USD). Market participants are focused on the upcoming Eurozone Sentix Investor Confidence data for February and a speech by European Central Bank (ECB) President Christine Lagarde later in the day.

On Friday, former US President Donald Trump announced plans to introduce reciprocal tariffs on multiple countries by Tuesday or Wednesday, though he did not specify which ones. This move has heightened concerns about a global trade war, fueling demand for the safe-haven USD.

“The immediate concern might not be inflation, as counter-effects like a demand slowdown could come into play. However, the bigger issue is uncertainty and the shift toward a more protectionist world,” said Charu Chanana, Chief Investment Strategist at Saxo.

Meanwhile, the Euro faces pressure from growing expectations of further ECB rate cuts amid sluggish economic growth. ECB Governing Council member Boris Vujcic stated that the market’s anticipation of three rate cuts this year is reasonable. However, he emphasized that greater clarity on monetary policy direction may not emerge until early in the second quarter.

Traders will keep a close eye on US trade policies, especially Trump’s repeated threats against Europe. JPMorgan economist Nora Szentivanyi noted that the objectives, timing, and tariff rates remain unclear. Nonetheless, the European Commission has stated it would retaliate firmly against any tariffs imposed by the US.

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EUR/USD Holds Below 1.0400 Ahead of Eurozone Retail Sales Data

EUR/USD Struggles Below 1.0400 Ahead of Eurozone Retail Sales Data

EUR/USD is trading lower around 1.0390 in the Asian session on Thursday, extending losses following a two-day recovery. Investors remain wary ahead of the release of Eurozone Retail Sales data later today.

Market predictions suggest that Eurozone retail sales scaled by 1.9% year on year in December, up from the previous 1.2% increase. However, the monthly number is expected to fall by 0.1%, erasing the 0.1% increase reported in November.

The euro remains under pressure as market sentiment points to further monetary easing by the European Central Bank (ECB). Policymakers feel optimistic that inflation will steadily return to the ECB’s 2% objective, lessening the need for additional tightening.

Meanwhile, the US Dollar Index (DXY), which tracks the dollar against six major currencies, has stabilized at 107.70, restricting EUR/USD’s upside potential. The dollar’s resiliency comes after a three-day losing skid, which puts pressure on the pair.

On Thursday, Federal Reserve Vice Chair Philip Jefferson reiterated his desire for keeping existing interest rates, underlining that the Fed’s policy remained restrictive despite the 100-basis-point drop. Meanwhile, San Francisco Federal Reserve President Mary Daly emphasized the central bank’s cautious attitude in the face of prolonged economic uncertainties.

The dollar weakened on Wednesday following a disappointing US Services PMI reading. The ISM Services PMI dropped to 52.8 in January from a revised 54.0 in December, falling short of the market consensus of 54.3. Looking ahead, traders are watching Friday’s US Nonfarm Payrolls (NFP) report, which might influence the Federal Reserve’s next policy actions.

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EUR/USD Stuck in Range Near 1.0375-1.0380 as Bulls Struggle for Direction

EUR/USD Struggles for Clear Direction, Stays Range-Bound Near 1.0375-1.0380

The EUR/USD pair continues in consolidation mode, failing to build on its recent recovery from the 1.0200 region—the lowest level since January 13. After reaching a weekly high earlier on Wednesday, the pair is fluctuating within a narrow range around 1.0375-1.0380, showing little change for the day amid mixed market signals.

Tuesday’s Job Openings and Labor Turnover Survey (JOLTS) indicated a cooling U.S. labor market, reinforcing expectations of Federal Reserve (Fed) policy easing. Markets are now factoring in the likelihood of two rate cuts by the Fed this year. Risk-on sentiment also remains prevalent, but should continue to weigh on demand for the safe-haven USD, and thereby support EUR/USD.

Upside momentum, however remains constrained by issues on the introduction of U.S. tariffs over the goods to be imported in Europe under Trump’s administration, among others, and the ECB dovish direction which is being felt in restraining the Euro though HICP was reported higher to an annual rate of 2.5% in the last month, still, does not allow much upside in this pair.

Looking ahead, market participants will focus on the final Eurozone Services PMI release, while the U.S. economic calendar highlights the ADP private-sector employment report and the ISM Services PMI. Movements in the USD could also be influenced by key FOMC member speeches. Still, Friday’s NFP report will focus more attention on it as it will help deliver a better picture of the situation in the U.S. labor market and set the direction for future Fed policy.

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GBP/USD Holds Above 1.2400 as Markets Watch China Tariff Developments

GBP/USD Holds Above 1.2400 as Markets Watch China Tariff Developments

GBP/USD extends its gains for a second consecutive session, trading around 1.2430 during Asian market hours on Tuesday. With  the  decision   by   U.S. President Donald Trump   to pause tariffs on Mexico and Canada , the pair benefits from a risk-on sentiment .

Despite this, investors continue to pay close attention to ongoing trade negotiations, making market volatility a major concern. Trump declared that he would postpone imposing high tariffs on Canada and Mexico for at least 30 days following their agreements to send 10,000 troops to the U.S. border to fight drug trafficking.

This move follows Trump’s recent decision to impose 25% tariffs on Mexican and Canadian goods, along with a 10% tariff on Chinese imports. Additional tariffs on China are anticipated to go into effect Tuesday at 5:00 GMT. Trump managed to say that talks with Chinese officials might happen “probably over the next 24 hours,” and that tariffs on China would be “very, very substantial” if an agreement could not be made.

Meanwhile, the U.S. Dollar Index (DXY), which tracks the USD against six major currencies, hovers around 108.70 after erasing most of its gains from the previous session. Strong U.S. economic data could provide support for the greenback, as the ISM Manufacturing PMI climbed to 50.9 in January from 49.3 in December, surpassing the expected 49.8.

While GBP/USD may rise, the British Pound’s upside may be limited, given the expectation that the Bank of England (BoE) will cut interest rates once again. Despite rising wages in the UK, the BoE is expected to lower interest rates by 25 basis points to 4.5% on Thursday.

The BoE’s Monetary Policy Committee (MPC) is expected to vote 8-1 in favor of the rate cut, with one member likely advocating for maintaining rates at their current level for now.

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EUR/USD Drops to 1.0200 on Trump’s Trade Tariffs

EUR/USD Slumps to Multi-Week Low Near 1.0200 Amid Trump’s Trade Tariffs

The EUR/USD pair extends its decline on Monday, plunging to the 1.0200 region—a three-week low—during the early Asian session. This drop brings the pair closer to its lowest level in over two years, last seen in January, reinforcing the ongoing multi-month downtrend.

The US Dollar (USD) gains broad strength following President Donald Trump’s weekend announcement of new tariffs: 25% duties on imports from Canada and Mexico, along with an additional 10% tariff on Chinese goods. These measures escalate global trade tensions, dampening investor appetite for riskier assets and boosting demand for the safe-haven USD. As a result, the EUR/USD pair faces renewed selling pressure.

Adding to the bearish sentiment, Trump also declared on Friday evening that he would impose tariffs on goods from the European Union. This, coupled with the European Central Bank’s (ECB) dovish stance, further weighs on the euro. Last Thursday, the ECB cut borrowing costs by 25 basis points (bps) as expected and signaled the possibility of additional rate cuts before the year’s end, exacerbating the euro’s weakness.

The policy divergence between the ECB and the Federal Reserve (Fed) further tilts market sentiment in favor of the USD. While the Fed has opted for a hawkish pause, supporting the dollar’s strength, a recent pullback in US Treasury yields may limit further USD gains and offer some relief to the EUR/USD pair. However, the overall market outlook suggests that the pair’s downside momentum is likely to persist.

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EUR/USD Holds Above 1.0400 | Focus on Q4 GDP & ECB Policy Decision

EUR/USD Holds Above 1.0400 Ahead of Q4 GDP Data and ECB Policy Decision

The EUR/USD pair is edging higher after three consecutive losses, trading near 1.0420 during Thursday’s Asian session. The rebound is primarily driven by a technical pullback in the US Dollar (USD). Meanwhile, the US Dollar Index (DXY), which tracks the greenback against six major currencies, remains just below 108.00.

Despite the recent uptick, further gains for EUR/USD may be capped as the USD could regain strength following the Federal Reserve’s (Fed) cautious approach to monetary policy. The Fed reinforced its hawkish stance by removing language suggesting confidence in inflation reaching its 2% target.

During his press conference, Fed Chair Jerome Powell emphasized that any policy changes would require “real progress on inflation or some weakness in the labor market.” As expected, the Fed maintained its overnight borrowing rate at 4.25%-4.50% during its January meeting on Wednesday. This decision follows three consecutive rate cuts since September 2024, totaling a one-percentage-point reduction.

Meanwhile, the Euro faces downward pressure as the European Central Bank (ECB) is widely expected to cut interest rates by 25 basis points in its policy meeting on Thursday, lowering the Deposit Rate to 2.75%. Market sentiment suggests that further rate cuts from the ECB may follow in the coming months, potentially weighing on the Euro.

Investors will closely watch the release of fourth-quarter Gross Domestic Product (GDP) data from the Eurozone and Germany on Thursday. Later in the day, focus will shift to the US Annualized GDP report, which could influence market sentiment and currency movements.

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US Core PCE Inflation Likely to Hold Steady

Pound Sterling Steady Ahead of US Core PCE Inflation Data

Pound Sterling Steady Ahead of US Core PCE Inflation Data

The Pound Sterling (GBP) remains subdued against the US Dollar (USD) during Friday’s London session. The GBP/USD pair has edged down this week as investors exercise caution ahead of the US core Personal Consumption Expenditures (PCE) Price Index data for May, set to be released today.

The core PCE inflation data, the Federal Reserve’s (Fed) preferred inflation measure, is projected to have slowed to 2.6% year-over-year (YoY) from April’s 2.8%. On a monthly basis, the underlying inflation is expected to have increased modestly by 0.1%, compared to the previous rise of 0.2%.

Soft inflation figures could raise expectations for early rate cuts by the Fed, while higher-than-expected numbers would likely diminish prospects for rate cuts, thereby strengthening the US Dollar. Currently, the US Dollar Index (DXY), which measures the Greenback’s value against six major currencies, is trading near the critical resistance level of 106.00.

According to the CME FedWatch tool, 30-day fed funds futures pricing data indicate that traders have priced in two rate cuts for this year, with the policy-easing cycle expected to begin at the September meeting. However, Fed officials have been advocating for maintaining current interest rates until there is clear evidence that inflation is on a steady decline towards the target rate of 2%.

On Thursday, Fed Governor Michelle Bowman reiterated that it is not yet appropriate to reduce interest rates, warning of potential further rate hikes if progress in reducing inflation stalls or reverses. This stance underscores the Fed’s cautious approach to policy changes, aiming to ensure that inflation trends are firmly under control before considering any rate cuts.

As the market awaits the core PCE data, the GBP/USD pair is likely to continue experiencing subdued trading. Investors will be closely watching the inflation figures to gauge the Fed’s next moves, which will significantly influence the USD’s strength and the GBP/USD pair’s direction in the near term.

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Australian Dollar Rises as Higher Inflation

Australian Dollar Rises as Higher Inflation Lowers RBA Rate Cut Odds

Australian Dollar Rises as Higher Inflation Lowers RBA Rate Cut Odds

The Australian Dollar (AUD) has gained traction following the release of May’s Monthly Consumer Price Index (CPI), which came in higher than expected. This persistently high inflation poses a challenge to the Reserve Bank of Australia’s (RBA) potential rate cuts, thereby providing support to the Aussie Dollar and underpinning the AUD/USD pair.

RBA Assistant Governor Christopher Kent highlighted on Wednesday the importance of vigilance regarding potential inflation increases. Kent emphasized that current policies are effectively contributing to slower demand growth and lower inflation. He also noted that the RBA is keeping all options open concerning future interest rate adjustments, as reported by Bloomberg.

This rise in the AUD comes as the US Dollar remains steady after posting gains on Tuesday. Investors are cautious ahead of significant US economic data releases later this week. The revised US Gross Domestic Product (GDP) for the first quarter (Q1) is set to be released on Thursday, followed by the Personal Consumption Expenditure (PCE) Price Index on Friday. These data points are critical as they will provide insights into the health of the US economy and influence the Federal Reserve’s monetary policy decisions.

The stronger-than-expected CPI data in Australia reflects ongoing inflationary pressures, which complicates the RBA’s policy path. With inflation remaining high, the central bank may be less inclined to cut interest rates, a factor that supports the AUD. Investors are now weighing the implications of these inflation figures on future RBA decisions, particularly in the context of global economic uncertainty.

In the US, the market is anticipating the GDP and PCE Price Index data to gauge the Federal Reserve’s next moves. A robust GDP report could reinforce the case for a continued pause in rate hikes, whereas a weaker report might revive expectations for potential easing. Similarly, the PCE Price Index, being the Fed’s preferred measure of inflation, will be closely watched. A higher reading could lead to a more hawkish stance from the Fed, while a lower figure might ease some inflation concerns.

Overall, the interplay between the Australian and US economic data is creating a dynamic environment for the AUD/USD pair. As traders digest these developments, the focus remains on central bank policies and their responses to inflationary pressures. The outcome of this week’s economic reports will be crucial in shaping the near-term direction of both currencies.

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Australian Dollar Falls Despite RBA's Hawkish Outlook

Australian Dollar Falls Despite RBA’s Hawkish Outlook

Australian Dollar Falls Despite RBA’s Hawkish Outlook

The Australian Dollar (AUD) continued its downward trend for the third consecutive session on Monday, yet there are indications that the decline in the AUD/USD exchange rate might be moderated by the monetary policy outlook from the Reserve Bank of Australia (RBA). During a recent press conference, as reported by ABC News, RBA Governor Michele Bullock explicitly mentioned that the Board is considering potential rate hikes in the future, rather than cuts, highlighting a hawkish stance in their monetary policy approach.

On the other side, the US Dollar (USD) holds its ground, remaining stable as Federal Reserve officials have pushed back the timeline for the year’s first anticipated rate cut. The adjustment in expectations was quantified by the CME FedWatch Tool, which now indicates that investors are pricing in a nearly 65.9% likelihood of a Fed rate cut in September, a decrease from 70.2% just a week earlier. This recalibration in investor expectations reflects a broader trend of cautious optimism and strategic adjustments among market participants, influencing the interplay between the AUD and USD as each navigates its respective economic signals and policy directions.

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Australian Dollar Rises on Strong PMI Data

Australian Dollar Rises on Strong PMI Data and Softer US Dollar

Australian Dollar Rises on Strong PMI Data and Softer US Dollar

The Australian Dollar (AUD) saw mild gains during Thursday’s Asian session, edging higher following the release of the Australian Judo Bank PMI report. The report indicated that business activity in Australia continues to grow, albeit at a slower pace than in March and April. Additionally, the Reserve Bank of Australia’s (RBA) recent decision to maintain a hawkish stance on interest rates is likely to support the AUD in the near term.

However, escalating geopolitical tensions in the Middle East pose potential risks. Israeli officials have reiterated their readiness for an all-out war against Hezbollah, which could drive investors towards safe-haven currencies like the US Dollar (USD). Such geopolitical uncertainties often lead to increased demand for the USD, as it is considered a safer asset during times of conflict.

Looking ahead, the focus will shift to the advanced US S&P Global Manufacturing and Services PMI data set to be released on Friday. If this data shows an improvement in US business activity for June, it could further bolster the Greenback. Stronger US economic data typically supports the USD by increasing expectations of future interest rate hikes by the Federal Reserve. This scenario could create a headwind for the AUD/USD pair, potentially limiting the Australian Dollar’s gains.

Despite these potential challenges, the AUD remains supported by domestic factors. The Australian Judo Bank PMI report, while showing a slowdown, still indicates growth in business activity. This resilience, coupled with the RBA’s hawkish stance, provides a solid foundation for the AUD. The central bank’s commitment to maintaining a tight monetary policy reflects confidence in the Australian economy’s underlying strength, which is likely to continue bolstering the currency.

In summary, the Australian Dollar is experiencing moderate gains supported by domestic economic data and the RBA’s monetary policy stance. However, geopolitical tensions in the Middle East and upcoming US economic data could influence the AUD/USD pair’s direction. Traders will need to monitor these developments closely, as they could impact market sentiment and drive short-term fluctuations in the currency pair. The interplay between domestic resilience and external uncertainties will be crucial in determining the AUD’s trajectory in the coming days.

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Australian Dollar Rises on RBA's Hawkish Stance

Australian Dollar Rises on RBA’s Hawkish Stance

Australian Dollar Rises on RBA’s Hawkish Stance

The Australian Dollar (AUD) surged on Wednesday, driven by the Reserve Bank of Australia’s (RBA) hawkish stance during its June meeting. The RBA’s decision to maintain current interest rates while signaling a prolonged period before any rate cuts has pushed market expectations for the start of the easing cycle to 2025. This outlook continues to support the AUD, providing it with significant upward momentum.

In contrast, the US Dollar (USD) is facing downward pressure due to weaker-than-expected Retail Sales data, which has increased the likelihood of the US Federal Reserve (Fed) cutting rates later this year. This data has undermined the Greenback across the board, adding to the AUD’s gains.

The US markets are closed on Wednesday in observance of Juneteenth National Independence Day, limiting immediate trading activity. However, investors are already looking ahead to the end of the week when the US S&P Global Manufacturing and Services PMI reports will be released. These reports are crucial indicators of US economic health, and any signs of expanding business activity could provide a lift to the USD, potentially capping the AUD’s current upward trend.

The RBA’s hawkish hold has been a significant factor in the AUD’s recent performance. By maintaining rates and signaling a delay in the easing cycle, the RBA has reinforced market confidence in the Australian economy. This stance contrasts with the Fed’s, which is increasingly seen as likely to implement rate cuts in response to softer economic data. The divergence in central bank policies is a key driver of the current currency movements.

In addition to central bank policies, economic data releases continue to play a pivotal role. The weaker US Retail Sales figures have cast doubt on the strength of the US economic recovery, fueling speculation about potential Fed rate cuts. Conversely, robust Australian economic data supports the RBA’s decision to hold rates steady and delay any easing.

Looking ahead, the focus will shift to the upcoming US PMI reports. Positive data indicating growth in US business activity could bolster the USD, limiting the AUD’s gains. However, if the data disappoints, it could further pressure the USD and support the AUD.

In summary, the Australian Dollar is benefiting from the RBA’s hawkish stance and weaker US economic data, which have shifted market expectations for both currencies. The upcoming US PMI reports will be crucial in determining the near-term direction for the AUD/USD pair.

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China's May Retail Sales Exceed Expectations

China’s May Retail Sales Exceed Expectations; Industrial Output and Investment Lag

China’s May Retail Sales Exceed Expectations; Industrial Output and Investment Lag

In May, China’s retail sales outperformed expectations, increasing by 3.7% year-on-year, surpassing the anticipated 3% rise forecasted by a Reuters poll of economists. This robust retail performance indicates resilient consumer spending despite broader economic challenges.

However, other key economic indicators did not fare as well. Industrial output grew by 5.6% year-on-year, falling short of the 6% growth expected. Fixed asset investment also missed forecasts, rising by only 4% compared to last May, just below the anticipated 4.2% increase. The National Bureau of Statistics (NBS) reported that total retail sales of consumer goods reached 3.92 trillion yuan ($540.32 billion), with urban area sales up 3.7% and rural area sales climbing by 4.1%.

The shortfall in fixed asset investment was significantly influenced by a sharper decline in real estate investment. Excluding real estate, total fixed asset investment was 8.6% higher compared to the previous year. This highlights the ongoing struggles within China’s real estate sector, which continues to drag on overall investment figures.

The urban unemployment rate remained stable at 5% in May, unchanged from April, and 0.2 percentage points lower than the same period last year. This steady unemployment rate suggests a relatively stable labor market amid fluctuating economic conditions.

China’s export sector showed strength, with exports growing by 7.6% year-on-year in May, exceeding the forecasted 6% increase. However, imports underperformed, rising by only 1.8%, missing expectations.

Loan data released Friday highlighted a continued lackluster demand for credit. Outstanding yuan loans increased by 9.3% in May from the previous year, marking the slowest growth on record since 1978. The M1 money supply, which includes cash in circulation and demand deposits, fell by 4.2% year-on-year in May, the steepest decline since records began in 1986. Analysts from Goldman Sachs noted that a state media outlet linked the slowdown in M1 growth to a crackdown on fake loans and outflows related to wealth management products.

Inflation data for May showed that consumer prices, excluding food and energy, rose by 0.6% year-on-year. This modest inflation increase indicates subdued price pressures within the broader economy, reflecting the mixed economic signals from various sectors.

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Japanese Yen's Downside Limited

Japanese Yen’s Downside Limited by Rising Producer Prices

Japanese Yen’s Downside Limited by Rising Producer Prices

The Japanese Yen (JPY) extended its losing streak for the fourth consecutive session on Wednesday, with the USD/JPY pair strengthening as investors favored the US Dollar (USD) ahead of the Federal Reserve’s (Fed) decision and the release of US inflation figures for May, scheduled for later in the North American trading hours.

The Japanese Yen might find some support from higher-than-expected Japanese Producer Price Index (PPI) data. The latest data revealed that producer prices surged by 2.4% year-on-year in May, surpassing market expectations of a 2.0% rise. This increase in producer prices has raised concerns about potential higher consumer inflation, which could influence future monetary policy decisions by the Bank of Japan (BoJ).

Despite the rise in producer prices, the BoJ is widely expected to maintain its current monetary policy stance unchanged on Friday. The divergence in interest rates between the US and Japan continues to undermine the Japanese Yen. The Fed’s tighter monetary policy contrasts sharply with the BoJ’s ongoing commitment to maintaining low-interest rates, creating a supportive environment for the USD/JPY pair.

The strength of the US Dollar is further bolstered by robust US economic data. The US Dollar Index (DXY), which measures the value of the USD against six major currencies, remains strong. Recent US jobs data for May showed significant employment gains, reducing the likelihood of a Fed rate cut in September. The CME FedWatch Tool indicates that the probability of a Fed rate cut in September by at least 25 basis points has decreased to 52%, down from 67% a week earlier.

Investors are now closely watching the upcoming US inflation data. A higher inflation reading could further diminish expectations for a Fed rate cut, potentially providing additional support for the USD. Conversely, if inflation data comes in lower than expected, it might renew market speculation about possible rate cuts later in the year, which could influence the USD/JPY pair.

In the meantime, the Japanese Yen’s downside might be limited by the unexpected rise in producer prices, which suggests underlying inflationary pressures in Japan. If these pressures translate into higher consumer prices, the BoJ may face increasing calls to adjust its ultra-loose monetary policy, which could lend support to the Yen.

Overall, the interplay between US monetary policy expectations and Japanese inflation data will be crucial in determining the direction of the USD/JPY pair in the near term. Investors will continue to monitor these factors closely, as any significant shifts could lead to notable movements in the currency markets.

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US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

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

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

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

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

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

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

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

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

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

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Cryptocurrency Move Back to Support the Pack to Level

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

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

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

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

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

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

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

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

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

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Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

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

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

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

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

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

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

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

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Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

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

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

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

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

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

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

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

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

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

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

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

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

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