Skip to main content

XtremeMarkets

Xtreme Markets Ltd

Web Trader
Register
Download App
Login
Affiliates
Xtreme Markets Logo

Market News

GBP/USD Ascends Towards 1.2700 Prior

GBP/USD Remains Below 1.2700 Before Fed Chair Powell’s Testimony

GBP/USD Remains Below 1.2700 Before Fed Chair Powell’s Testimony

In the early Asian trading session on Wednesday, the GBP/USD currency pair was observed holding below the significant 1.2700 mark, indicating a slight downtick influenced by a resurgence in the US Dollar (USD). This currency movement sets the stage for a day filled with key economic events, including the UK S&P Global Construction Purchasing Managers’ Index (PMI) and the eagerly awaited testimony of Federal Reserve Chair Jerome Powell. The pair was trading near 1.2695, reflecting a modest 0.08% decline from the previous day.

A recent statement by Atlanta Federal Reserve President Raphael Bostic has further stirred market speculation. On Monday, Bostic expressed his expectation of an initial interest rate cut by the Federal Reserve in the third quarter of this year, followed by a pause to assess the impact of this policy change on the US economy. Market participants, guided by the CME FedWatch Tool, are currently pricing in a meager 3.0% chance of a 25 basis point rate reduction at the upcoming Federal Open Market Committee (FOMC) meeting in March.

Adding to the complexity of the market dynamics was Tuesday’s report from the Institute for Supply Management (ISM). The ISM survey revealed that the US Services PMI dropped to 52.6 in February, down from 53.4 in January, falling short of market expectations set at 53.0. This decline in the PMI points towards a slower expansion in the services sector, a critical component of the US economy.

In the UK, Chancellor Jeremy Hunt’s speech at the Spring Budget announcement drew attention. Hunt unveiled a significant cut in national insurance by 2p, signaling a potential shift in fiscal policy. Alongside this development, investors are also anticipating the Bank of England’s (BoE) move towards interest rate cuts by August, aiming to bring inflation back to the 2% target, followed by a predicted increase.

A major focal point for the day is Fed Chair Jerome Powell’s semiannual testimony before Congress. This event is closely monitored by investors, as Powell’s remarks could provide insights into the Fed’s future monetary policy direction. Adding to the week’s significance is the US Nonfarm Payrolls (NFP) report due on Friday, with expectations of an addition of 200,000 jobs in February. These events are crucial for traders who are keenly watching the GBP/USD pair, looking for trading opportunities influenced by these economic indicators and policy decisions.

Read More
EUR/USD Eases Near

EUR/USD Gains Momentum in the Mid-1.0800 Range Due to a Weakening US Dollar

EUR/USD Gains Momentum in the Mid-1.0800 Range Due to a Weakening US Dollar

As the new week commences, the EUR/USD currency pair exhibits a positive trajectory in the early trading hours of Monday in Asia. This uptrend in one of the major currency pairs is primarily underpinned by a diminishing strength of the US Dollar (USD). A pivotal moment for investors this week will be the European Central Bank (ECB) monetary policy meeting scheduled for Thursday, where it is widely anticipated that interest rates will remain unaltered. Currently, the EUR/USD is trading at a value of 1.0845, reflecting a slight increase of 0.07% for the day.

This recent development in the EUR/USD pair’s performance is happening against a backdrop where several policymakers from the Federal Reserve (Fed) have expressed that future decisions on interest rate cuts will be heavily influenced by emerging economic data. Prominent figures such as Boston Fed President Susan Collins and New York’s John Williams have hinted that the first rate reduction could be feasible later in the year. In a similar vein, Raphael Bostic from the Atlanta Fed anticipates a shift towards an easing policy by this summer.

Adding to the complexity of the market dynamics is the latest US Manufacturing Purchasing Managers’ Index (PMI), which declined to 47.8 in February, falling from its previous mark of 49.1 and not meeting the market expectations. This data, released by the Institute for Supply Management (ISM), also highlighted a decrease in the New Orders Index to 49.2, indicating a contraction. Moreover, the Production Index was recorded at 48.4, with the Employment Index at a lower 45.9.

On the European front, the ECB is cautiously waiting for more indicators, particularly regarding the relaxation of wage pressures, before making any significant adjustments to its monetary policy stance. It is highly likely that the ECB will maintain the current interest rates in its upcoming March meeting. Market participants are keenly awaiting the post-meeting press conference for insights into future policy directions. Any hawkish comments from the central bank could potentially bolster the Euro (EUR) and create a challenging environment for the EUR/USD pair.

Looking ahead, the focus will shift to the Eurozone Services PMI, due for release on Tuesday, followed by the German Trade data and Eurozone Retail Sales on Wednesday. If these datasets surpass expectations, they could mitigate concerns about a possible recession in the Eurozone. The spotlight will then turn to the ECB’s interest rate decision on Thursday, which precedes the eagerly awaited US Nonfarm Payrolls (NFP) announcement. These events collectively hold significant potential to influence the trajectory of the EUR/USD pair in the week ahead.

Read More
GBP/USD Modestly Recovers

GBP/USD Modestly Recovers Near 1.2630, Limited Upside Potential

GBP/USD Modestly Recovers Near 1.2630, Limited Upside Potential

During the Asian trading session on Friday, the GBP/USD currency pair witnessed a revival of buying interest, breaking a two-day losing streak that had led it to a one-week low in the region of 1.2615-1.2610 just a day earlier. The pair’s spot prices are currently hovering around the 1.2630-1.2635 zone. This change in momentum is largely attributed to the dynamics surrounding the US Dollar (USD).

The market’s attention was particularly drawn to the US Personal Consumption Expenditures (PCE) Price Index data released on Thursday. The report indicated that annual inflation in January reached its lowest point in three years, fueling speculation about a potential interest rate cut by the Federal Reserve (Fed). This speculation, however, didn’t provide much support to the USD Index (DXY), which measures the USD against a basket of other major currencies. The DXY struggled to build on its recent recovery from a critical 200-day Simple Moving Average (SMA), partly due to the prevailing risk-on market sentiment. This sentiment tends to reduce the appeal of the USD as a safe-haven asset, thereby offering some support to the GBP/USD pair.

On the British side, the Pound (GBP) is finding support from the Bank of England (BoE) policymakers’ efforts to counter market expectations for imminent interest rate cuts. This stance has lent a positive tone to the GBP/USD pair. However, there is a growing consensus that the Fed might delay any interest rate reductions until their June policy meeting, a view reinforced by hawkish comments from several Federal Open Market Committee (FOMC) officials. This outlook has helped sustain high US Treasury bond yields, which could provide a boost to the USD and potentially restrain bullish traders in the GBP/USD market.

Investors are now focusing on the upcoming release of the final UK Manufacturing Purchasing Managers’ Index (PMI) and a scheduled speech by BoE Chief Economist Huw Pill for fresh impetus. Additionally, the early North American session will bring attention to the US ISM Manufacturing PMI, the revised Michigan Consumer Sentiment Index, and comments from Fed officials. These events, along with US bond yield movements and broader risk sentiment, are expected to influence the USD and create short-term trading opportunities in the GBP/USD pair.

Despite the current uptick, the GBP/USD pair appears set to close the week with losses, particularly in anticipation of significant US economic data releases scheduled for the start of the new month.

Read More
EUR/USD Falls Amid Risk-Aversion

EUR/USD Falls Amid Risk-Aversion Before Eurozone, US Data; Trades Near 1.0840

EUR/USD Falls Amid Risk-Aversion Before Eurozone, US Data; Trades Near 1.0840

The Euro/US Dollar exchange rate, known as EUR/USD, has seen a decrease, reaching nearly 1.0840 in the Asian market on Wednesday. This drop is mainly because traders are being very careful due to some important economic reports that are expected to be released soon. These reports include the Euro Zone Economic Sentiment Indicator for February and the preliminary data on the United States’ economic growth for the last quarter (Q4) of the year.

Meanwhile, the US Dollar Index (DXY), which measures the strength of the US dollar against other major currencies, is trying to rise due to the cautious mood in the market. However, the lower interest rates offered on US government bonds (also known as Treasury yields) might be causing the US dollar to face some challenges. At the moment, the DXY has improved slightly to about 103.90, with the interest rates for 2-year and 10-year US government bonds at 4.68% and 4.29% respectively.

Recently, there was a small increase of 0.1% in the US Housing Price Index, which was less than the expected 0.3% and the previous 0.4%. Also, the orders for long-lasting goods made in the US fell by 6.1%, which was more than the anticipated 4.5% drop. According to predictions by the CME FedWatch Tool, the chances of the US Federal Reserve lowering interest rates in March are now only 1%. However, there’s a 21% chance of a rate cut in May and almost a 50% chance in June.

On the other side, the Euro might see some positive effects from recent statements by the President of the European Central Bank (ECB), Christine Lagarde. She mentioned that even though inflation is getting closer to the ECB’s target, the bank plans to keep its current policies for some time.

In Germany, a survey about consumer confidence for March showed a result of -29, which was in line with expectations and slightly better than February’s -29.6. Later this week, more data from Germany, including retail sales and consumer price inflation, will provide further insights into the economic situation.

Experts at Commerzbank are paying close attention to the inflation data coming out on Friday, but they don’t see any clear signs that the Euro will weaken. On the other hand, Kit Juckes, a top strategist at Société Générale, believes that whether the Federal Reserve or the European Central Bank reduces interest rates first or more aggressively will be crucial in deciding the direction of the EUR/USD exchange rate this year.

Read More
EUR/GBP Nears 0.8540 Before

EUR/GBP Nears 0.8540 Before ECB’s Lagarde Speech

EUR/GBP Nears 0.8540 Before ECB’s Lagarde Speech

The EUR/GBP currency pair witnessed a halt in its three-day downtrend, observing a modest rise to approach 0.8540 during Monday’s Asian trading session. This upward movement is primarily attributed to the Euro (EUR) gaining strength following hawkish remarks from members of the European Central Bank (ECB). In addition, the ECB’s Monetary Policy Meeting Accounts for January revealed a cautious approach by policymakers towards easing monetary policy. The consensus among them highlighted that it was too early to consider discussions on rate reductions.

Traders are now keenly awaiting the speech by ECB President Christine Lagarde, scheduled for later on Monday, for further cues on the ECB’s monetary policy direction.

Recent comments from various ECB officials have contributed to shaping the market sentiment. For instance, ECB member Yannis Stournaras projected a potential rate cut in June, dismissing any likelihood of such action in March. Conversely, Joachim Nagel, another ECB policymaker, expressed confidence in controlling inflation, stressing the need for a data-driven approach to policy decisions rather than emulating other central banks.

On the UK front, the decline in consumer confidence for February has exerted downward pressure on the British Pound (GBP), thereby providing support to the EUR/GBP pair. The GfK Consumer Confidence index for the UK, released on Friday, registered a disappointing -21, falling short of market expectations of -18 and deteriorating from the previous -19. This indicates a weakening in consumer confidence regarding the UK’s economic activity for the month of February.

Analysts at MUFG Bank have observed that recent PMI data from the UK suggests an end to the technical recession experienced in the latter half of the previous year. They anticipate that the improvement in global risk sentiment will likely lead the Bank of England (BoE) to adopt a wait-and-see approach, in line with other central banks. There is also speculation about the UK inflation rate hitting the 2% target by April.

Adding to the array of economic speeches, Huw Pill, the Chief Economist at the Bank of England, is also slated to address the public on Monday. His insights will be closely monitored for indications of the BoE’s future monetary policy actions and their potential impact on the GBP. As the market navigates through these developments, the EUR/GBP pair’s performance remains a key focus, reflecting broader economic trends and monetary policy expectations in Europe and the UK.

Read More
EUR/USD Stabilizes Near

EUR/USD Stabilizes Near 1.0820 After PMI-Driven Volatile Session

EUR/USD Stabilizes Near 1.0820 After PMI-Driven Volatile Session

The EUR/USD currency pair exhibited consolidation patterns following a tumultuous trading session triggered by the release of significant Purchasing Managers Index (PMI) data from both Europe and the United States on Thursday. During the early hours of Friday’s Asian trading session, the Euro (EUR) demonstrated stability, hovering around the 1.0820 mark, as investors evaluated the implications of mixed data regarding private sector business activities within the European Union (EU).

The day’s trading dynamics were heavily influenced by the latest PMI figures from the Eurozone and Germany, revealing a complex economic landscape. February’s PMI data showed a divergence in performance between the services and manufacturing sectors. While the preliminary Services PMIs for both the Eurozone and Germany indicated an upward trend, the Manufacturing PMIs did not meet market expectations, reflecting ongoing challenges in the manufacturing sector.

Amidst this backdrop, the European Central Bank (ECB) released its Monetary Policy Meeting Accounts for January, showcasing a cautious stance among policymakers. The minutes revealed a consensus against discussing rate cuts at the current juncture, underlining the need for prudence in monetary policy adjustments. ECB officials acknowledged some positive developments in inflation trends, adopting a more optimistic outlook compared to previous years. However, they were unanimous in their view that potential downward revisions in March’s inflation projections would not automatically warrant rate cuts.

Across the Atlantic, the US Dollar Index (DXY) remained firm, trading near 103.90. This strength was partly underpinned by the rising yields of US Treasury bonds, which stood at 4.71% for the 2-year bonds and 4.33% for the 10-year bonds at the time of writing. Additionally, the US Dollar (USD) found support following the release of encouraging labor market data from the United States.

The US Bureau of Labor Statistics reported that weekly Initial Jobless Claims had fallen to 201K for the week ending on February 16, significantly below the market forecast of 218K and the previous figure of 213K. This data suggests a robust labor market, which could have implications for the broader economy.

Regarding PMI data, the S&P Global US Services PMI recorded a figure of 51.3 in February, slightly below expectations of 52.0 and the previous month’s 52.5. Conversely, the Manufacturing PMI showed an improvement, reaching 51.5, which exceeded the anticipated 50.5 and the prior figure of 50.7. The US Composite PMI, however, declined to 51.4 in February from 52.0 in the previous month.

Further bolstering the US Dollar’s position were hawkish comments from Federal Reserve officials. They emphasized the unlikelihood of interest rate cuts in the near term, suggesting a continued focus on controlling inflation and supporting economic stability. This stance may provide additional strength to the USD in the international currency markets.

Read More
Focus Shifts to FOMC Minutes

GBP/USD Remains Steady Above 1.2600, Focus Shifts to FOMC Minutes

GBP/USD Remains Steady Above 1.2600, Focus Shifts to FOMC Minutes

During the early hours of Wednesday’s Asian trading session, the GBP/USD pair saw a modest rise, climbing above the 1.2600 mark. This upward movement is largely attributed to positive remarks from Andrew Bailey, the Governor of the Bank of England (BoE), which provided a boost to the Pound Sterling (GBP). At present, the major currency pair is trading around 1.2625, showing no significant change for the day.

The shift in investor sentiment regarding the Federal Reserve’s (Fed) anticipated interest rate cuts has been a key factor influencing the pair’s dynamics. This change in outlook followed the release of the U.S. January Producer Price Index (PPI) data last week, which signaled persistent inflationary pressures in the U.S. economy. Consequently, market participants are now aligning their expectations to forecast the Fed’s initial rate cuts to occur between May and June during the monetary policy meeting. The upcoming release of the Federal Reserve Open Market Committee’s (FOMC) minutes from January’s policy meeting is eagerly awaited, as it is expected to shed light on the Fed’s future interest rate trajectory.

Tuesday’s testimony by BoE Governor Andrew Bailey on inflation and the economic outlook played a significant role in the Pound’s strength. Governor Bailey expressed his comfort with the market’s projections of interest rate cuts in 2023, citing signs of recovery in the British economy after its plunge into a recession in late 2023. He further noted that inflation does not necessarily have to fall below the 2% target before the initiation of rate cuts, suggesting the possibility of a rate decrease within the year, though without specifying an exact timeline.

As the week progresses, the focus will shift to the release of the FOMC Minutes on Wednesday. These minutes are anticipated to provide deeper insights into the Fed policymakers’ hesitancy to commence policy easing in the first quarter of 2024. Additionally, the upcoming release of the preliminary U.S. S&P Global PMI for February on Thursday is another significant event on the economic calendar. These developments are expected to offer clearer directional cues for the GBP/USD currency pair.

Overall, the GBP/USD pair’s trajectory is being shaped by a combination of optimistic domestic factors from the UK and broader economic indicators from the US. The upcoming economic releases and policy minutes will be crucial in determining the near-term movement of this currency pair, as traders and investors alike gauge the economic health and policy stances of both the UK and the US.

Read More
China's Economy Yet

Asian Stocks Decline Due to Chinese Market Impact, Dollar Experiences Weakness

Asian Stocks Decline Due to Chinese Market Impact, Dollar Experiences Weakness

Asian markets experienced a downturn on Friday, influenced by Chinese shares and with little direction from Wall Street, closed for a holiday. Meanwhile, the dollar remained subdued as expectations grow that U.S. interest rates have reached their peak. Japan’s core consumer inflation and factory activity data had a minimal impact on the yen.

The MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4%, although it’s still on track for a weekly rise of 0.9% and a significant 7.1% increase in November. This uptick is largely due to growing investor confidence that U.S. interest rates have reached their maximum, with focus shifting to the timing and extent of future rate cuts. Japan’s Nikkei, returning from a holiday, jumped 1.0%, nearing a 33-year peak achieved earlier in the week.

Chinese blue chips dropped 0.3%, and Hong Kong’s Hang Seng index plummeted 1.3%, erasing previous gains. Hong Kong-listed Chinese developers also fell 0.7%, despite a recent 6.4% surge following new support measures from Beijing.

Shane Oliver, AMP’s chief economist, noted that markets might undergo a period of consolidation after a rapid rebound, possibly affecting the traditional year-end rally. With U.S. markets closed for Thanksgiving and minor uplifts in European shares and the euro from better-than-expected euro zone PMIs, global market dynamics remained mixed.

The European Central Bank’s latest minutes indicated that while inflation in the euro zone is expected to decline, rate hikes remain a possibility. In bond markets, U.S. Treasury yields rose slightly as trading resumed in Asia.

The dollar struggled against other major currencies, nearing a three-month low, while the British pound strengthened, supported by positive business survey results that led to a reassessment of the Bank of England’s rate cut timeline.

Oil prices showed mixed reactions, with Brent crude slightly up and West Texas Intermediate crude down, following concerns about the delayed OPEC+ meeting. Gold prices remained stable at $1,992.75 per ounce, reflecting the cautious sentiment in global markets.

Read More
Dollar Starts 2024 at Peak Since

Asian Stocks Reach 2-Month High as Dollar Takes Defensive Stance Amid Fed View

Asian Stocks Reach 2-Month High as Dollar Takes Defensive Stance Amid Fed View

Asian stocks reached a two-month high on Tuesday, mirroring gains on Wall Street, while the dollar remained weak due to expectations that the U.S. Federal Reserve has concluded its interest rate hike cycle.

The MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 0.97% to 510.11, touching its highest level since September 18. It has surged by 7% this month, marking its most substantial monthly gain since January.

In Europe, the risk-on sentiment is poised to continue, with Eurostoxx 50 futures up by 0.18%, German DAX futures 0.14% higher, and FTSE futures up 0.01%.

Investors are eagerly awaiting the release of the Federal Reserve’s meeting minutes to discern the future direction of interest rates. They are also closely monitoring earnings from Nvidia, which reached a record high on Monday.

Wall Street saw gains across its three major stock averages on Monday, with the Nasdaq leading the charge with a 1% rally, driven by Microsoft’s record high. The company recently hired Sam Altman, who formerly led OpenAI.

November has witnessed a broad-based rebound in global stock markets as economic data hinted at a potential easing of U.S. inflation. This has led to expectations that the Federal Reserve might halt its monetary tightening and consider rate cuts next year.

Elsewhere in Asia, Japan’s Nikkei edged higher, remaining close to its 33-year high reached on Monday. The index has surged by approximately 28% this year, making it the best-performing stock market in Asia.

China’s blue-chip CSI300 Index was 0.58% higher, and Hong Kong’s Hang Seng Index gained 0.78% on reports of Beijing’s new stimulus measures for the property sector, boosting risk appetite.

Lower yields in the Treasury market, driven by strong demand in the sale of 20-year Treasury bonds, have reinforced the belief that inflation will decelerate, and the Fed may cut rates next year. Consequently, the yield on 10-year Treasury notes dropped by 2.9 basis points to 4.393%, while the yield on the 30-year Treasury bond fell by 4.2 basis points to 4.533%.

The dollar continued to weaken, with the dollar index down 0.135% at 103.31, touching a near three-month low of 103.17 earlier in the session. The Japanese yen gained 0.22% to 148.03 per dollar, moving away from its one-year low of 151.92 reached last week. The Australian dollar, often considered a risk appetite indicator, reached a three-month high of $0.65775.

Australia’s central bank chief emphasized the challenge of inflation over the next one to two years, following the recent interest rate hike to combat rising prices.

Oil prices retreated after a previous day’s rally, with U.S. crude slipping by 0.46% to $77.47 per barrel, and Brent crude at $81.94, down 0.46% for the day.

Read More

Market Trepidation as Investors Anticipate Federal Reserve’s Next Moves

Market Trepidation as Investors Anticipate Federal Reserve’s Next Moves

As trading commenced this week, apprehension took hold of the global markets, resulting in a dip in stock prices and raising questions about the Federal Reserve’s upcoming policy decisions. Asian equity benchmarks, which had been on a steady climb, were halted in their tracks. Notably, South Korea’s Kospi Index took a significant plunge of over 3% after experiencing its most substantial surge since 2020, following the reinstatement of a short-selling ban. This downward trend echoed through European and US stock futures, which also saw a decline.

Market Analyst Jun Rong Yeap of IG Asia Pte. remarked on the previous day’s commendable rallies, indicating that markets were retreating from those peaks amidst strengthening bond yields and a robust US dollar that set the tone for the week.

Investors and traders are now gauging the Federal Reserve’s next steps, with expectations that the Fed might resist further easing of financial conditions, maintaining flexibility in policy direction. Minneapolis Fed President Neel Kashkari has expressed caution, suggesting it is premature to claim victory over inflation despite emerging signs of subdued price pressures. In the coming days, the financial community will closely monitor the discourse of various Fed officials, including Chair Jerome Powell, for clearer guidance.

On the front of government debt, the markets saw stabilization after an initial surge in Treasury yields, which climbed by eight basis points, spurred by a considerable issuance of corporate debt and anticipation of forthcoming auctions. This activity strengthened the US dollar, which gained ground against its major counterparts in the Group-of-10.

Max Wasserman, the founder and senior portfolio manager at Miramar Capital, shared insights on Bloomberg Television, indicating a likelihood of trading within a specified range as the market seeks clarity on the trajectory of core inflation and the Fed’s response.

The currency and rate swaps market is currently pricing in more than a full percentage point of rate cuts by the Federal Reserve by the end of 2024, despite expectations of a peak rate of 5.37%. Contributing to the busy start of the week was the analysis of the Senior Loan Officer Opinion Survey (SLOOS), which revealed persisting tight standards and diminished demand at US banks.

In Australia, the dollar and equity markets felt additional pressure as the central bank resumed rate hikes after a pause, citing heightened inflation risks and a commitment to assess further data and risks for potential policy tightening.

Adding to the global economic concerns, China reported a more pronounced decline in exports for October than anticipated, underscoring a continued slump in international trade and a delicate recovery within its own borders. The offshore yuan remained relatively stable post-release of the trade data.

As the day unfolds, investors’ attention will turn to Europe, with anticipated earnings reports from major corporations, including UBS Group AG. The energy sector is also in the spotlight, with oil prices experiencing a dip amid an uncertain demand forecast and renewed skepticism about the conclusion of the Fed’s rate hikes, despite extended supply cuts by Saudi Arabia and Russia.

The markets are poised on a knife-edge, with investor sentiment swinging between caution and optimism as they navigate through a plethora of economic signals and await decisive actions from central banks, especially the Federal Reserve, which remains a focal point in global financial discourse.

Read More

Turbulence in Asian Stocks and Anticipated European Market Openings in Light of Key Data Releases

Turbulence in Asian Stocks and Anticipated European Market Openings in Light of Key Data Releases

In the wake of unexpected economic data releases, Asian stock markets experienced a downturn on Tuesday, with most indices reflecting a downward trend. At the same time, European stock markets are gearing up for a diverse opening, eyeing imminent Eurozone GDP and CPI announcements.

The focal point of this decline was largely influenced by China’s PMI data, which failed to meet analysts’ expectations. This was further coupled with the Bank of Japan (BoJ) announcing modifications to its bond yield control policy post its October session. With the Federal Reserve meeting slated for Wednesday, there is widespread anticipation, potentially leading to increased caution amongst market participants.

Further elaborating on the Federal Reserve’s stance, Chair Jerome Powell has confirmed that there wouldn’t be any changes in the rates in the forthcoming meeting. Yet, market players will be keenly observing remarks from Fed officials during the scheduled press conference. The seemingly dovish inclination of US policymakers might be a catalyst for oscillations in risk-prone assets, primarily the stock markets.

Delving deeper into the Asian market specifics: Shanghai noted a decline of 0.19%, settling at 3,015; the Shenzhen Component Index took a dip of 0.90% to 9,838; Hong Kong’s Hang Seng experienced a steep fall of 1.70% to 17,110; South Korea’s Kospi plummeted by 1.38%; India’s NIFTY 50 saw a decrease of 0.16%, while in contrast, Japan’s Nikkei rose marginally by 0.16%.

A considerable factor contributing to the pressure on Chinese equities was the subpar Manufacturing Purchasing Managers’ Index (PMI) data. It receded to 49.5 in October from a previous 50.2 in September, missing the market projection of 50.2. Concurrently, the NBS Services PMI also fell to 50.6 in October, not meeting the anticipated consensus of 51.8.

Shifting focus to Japan, the BoJ maintained its interest rate and the 10-year Japanese Government Bond (JGB) yield target at -0.1% and 0%, respectively. Following its October deliberation, the bank introduced more flexibility to the YCC and adjusted its verbiage pertaining to the 1.0% 10-year JGB yield ceiling.

European stock markets are prepping for a mixed start, with investors keenly awaiting key data such as German Retail Sales, preliminary Eurozone inflation figures, and the Gross Domestic Products for Q3. Providing a backdrop, Monday’s data showcased a slight recovery in German growth, registering a 0.1% quarterly fall, better than the expected 0.3% slump. Also, the German CPI for October stood at 3.8% YoY, marking the lowest since August 2021.

Read More

Asian Equities Experience Uptick Amid US Bond Yield Dip and China’s Economic Stimulus Plans

Asian Equities Experience Uptick Amid US Bond Yield Dip and China’s Economic Stimulus Plans

On Friday, the majority of Asian stock markets displayed promising signs of positive trading. A noteworthy factor in this uptick has been the declining US Treasury bond yield, which bolstered regional stocks as investors keenly awaited the release of the US Core Personal Consumption Expenditures Price Index (PCE) data set for later that day. However, ongoing geopolitical turmoil in the Middle East could cast a shadow, potentially applying downward pressure on these stock markets.

Key indices from various nations demonstrated these upward trends: China’s Shanghai grew by 0.35% reaching 2,998, Shenzhen Component Index surged by 1.11% to 9,672, Hong Kong’s Hang Sang leaped by 0.99% marking 17,213, South Korea’s Kospi showed a marginal increase of 0.02%, while Japan’s Nikkei boasted an impressive rise of 1.14%.

Chinese stocks, in particular, showcased a notable rebound from the lows of the past several months. This resurgence is attributed to the Chinese government’s robust economic move of issuing bonds worth 1 trillion yuan. This strategic step is aimed at catalyzing and invigorating local economic growth.

Meanwhile, in Japan, economic indicators presented some surprises. The nation witnessed inflation rates rising at a swifter pace than earlier projections for October. This unexpected increase might influence the Bank of Japan (BoJ) to adopt a more assertive and hawkish approach in their forthcoming BoJ meeting scheduled for the next week.

Diving deeper into Japan’s economic landscape, the National Consumer Price Index (CPI) for October recorded a jump to 3.3% YoY, a climb from its previous 2.8%, as reported early Friday by the Japan Statistics Bureau. Furthermore, the National CPI excluding fresh food also saw an increase, marking 2.7% YoY in October, up from September’s 2.5%.

Down south, Australia also witnessed shifts in its economic indicators. The Producer Price Index (PPI) of Australia moderated to 3.8% YoY in Q3, a slight dip from the 3.9% recorded earlier. Quarter-wise, the figures landed at 1.8%, showing a significant rise from the previous 0.5%.

In the larger global context, investors are now turning their focus to the US Core Personal Consumption Expenditures Price Index (PCE) data for September, releasing on Friday. The anticipated monthly and annual core figures are projected to be 0.3% and 3.7%, respectively. Moreover, as the week concludes, all eyes will be on the Federal Open Market Committee (FOMC) gathering in the upcoming week, an event that could usher in market volatility.

Read More
Oil Price Surge May Limit Gains

Asian shares rise on strong corporate profits and lower oil prices

Asian shares rise on strong corporate profits and lower oil prices

Asian markets showed resilience and optimism on Wednesday, following the lead of Wall Street, as major corporations like Verizon exceeded profit expectations for the summer season. This boost in corporate earnings has instilled hope that companies will finally show growth after a year of stagnation, a development of utmost significance for global stock markets, which have grappled with the pressures of surging bond yields.

The recent surge in the 10-year Treasury yield, which has climbed from below 3.50% in the spring, has been a cause for concern. It is steadily approaching the Federal Reserve’s main overnight interest rate, which currently stands at its highest level since 2001, above 5.25%. The rapid rise in yields has adverse effects on various investments, including stocks and cryptocurrencies, and also has the potential to hamper economic growth, introducing stress into the broader financial system.

As of early Wednesday, the 10-year Treasury yield remained stable at 4.84%, indicating a temporary respite from its upward trajectory. In the Tokyo stock market, the Nikkei 225 index surged by 1.3%, reaching 31,466.92 points. Hong Kong’s Hang Seng index also saw robust gains, rising by 1.8% to 17,290.91, while the Shanghai Composite index registered a 0.5% increase, reaching 2,977.84 points. Conversely, South Korea’s Kospi experienced a 0.4% decline, settling at 2,373.88 points, and the S&P/ASX 200 in Sydney remained relatively unchanged at 6,856.60 points. India’s Sensex faced a 1.3% dip, while the SET index in Bangkok soared by 1.2%.

On Tuesday, Wall Street exhibited a strong performance, with the S&P 500 climbing by 0.7% to reach 4,247.68 points, breaking a five-day losing streak. The Dow Jones Industrial Average also saw a 0.6% increase, closing at 33,141.38 points. Meanwhile, the Nasdaq composite displayed an even more robust gain of 0.9%, closing at 13,139.87 points.

Verizon’s impressive performance particularly stood out, as its stock surged by 9.3%. The company reported a 20% increase in broadband subscribers and exceeded analysts’ profit expectations for the summer season. General Electric also made significant gains, with its stock rising by 6.5% after reporting better-than-expected earnings and raising its profit forecast for the year. Coca-Cola followed suit with a 2.9% increase, attributing its success to growth in markets such as Mexico and India, which contributed to better-than-expected summer profits.

Despite concerns surrounding rising interest rates and bond yields, the broader economy has displayed remarkable resilience. A robust job market and strong consumer spending have supported economic growth. However, there is lingering anxiety among investors that even if interest rates and yields stabilize at current levels, they may still be high enough to potentially trigger a recession if the Federal Reserve chooses to maintain its current stance. The situation continues to be closely monitored by market participants and economists alike.

Read More

Nikkei 225 & Hang Seng Fall: Rising US Yields, Lower Risk Appetite

Nikkei 225 & Hang Seng Fall: Rising US Yields, Lower Risk Appetite

Asian stocks witnessed a pronounced downturn on Friday, largely influenced by global bond market dynamics that have steadily been weakening investors’ risk appetite. The situation is further exacerbated by mounting concerns over the escalating tensions between Israel and Hamas. This geopolitical instability, coupled with economic concerns, has made investors increasingly wary.

The possibility of the United States raising its interest rates has cast a shadow over the regional markets. Higher interest rates typically deter risk-oriented investments, making these markets less attractive. Such a move by the U.S. can potentially limit the inflow of foreign capital, thereby stifling the economic potential of these regions. 

Delving into specific market metrics, as of the latest update, the SSE Composite Index in China recorded a 0.27% drop, settling at 2,997 points. Meanwhile, the Shenzhen Component Index saw a dip of 0.36%, bringing it down to 9,620 points. Japan’s flagship index, the Nikkei 225, also wasn’t spared, falling 0.18% to 31,375. The Hang Seng in Hong Kong reported a 0.41% decrease, the Korean KOSPI index slid to 2,382, and Taiwan’s Weighted Index declined by 0.20%.

In China, concerns surrounding its property sector played a significant role in the stock market’s dip. Despite data suggesting robust economic growth, these concerns have acted as a counterbalance, diluting the market’s potential growth. Adding to the Chinese market’s woes is the looming uncertainty about a potential default by real estate giant, Country Garden Holdings. The company’s recent failure to make a timely payment on its international bonds has left traders and investors on edge, making them more cautious about Chinese assets.

Japan’s equity market took a hit when data released on Friday showed that the consumer price index inflation in September surpassed prior expectations. It’s worth noting that this inflationary indicator, which the Bank of Japan (BoJ) monitors closely, is at a level reminiscent of figures seen over four decades ago. Such statistics underline the enduring nature of inflationary pressures within Japan’s economic framework.

Moreover, the tech sector in Asia, which often serves as a barometer for global tech trends, has been under considerable strain this week. This is primarily due to a surge in global bond yields, causing investors to reconsider their stance on growth stocks. As a result, the appeal of tech shares in the region has waned. Significant players like SK Hynix Inc and Samsung Electronics saw their stock prices decline, adding to the downward pressure on South Korea’s KOSPI index.

 

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

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

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

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

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

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

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

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

Read More
Gold Price Climbs Steadily

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

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

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

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

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

Trump’s Tariff Announcement Sparks Market Uncertainty

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

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

Fed Policymakers Express Caution Amid Economic Uncertainty

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

Several Fed officials have weighed in on economic policy:

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

What’s Next for Gold?

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

Read More
Gold Price Rally Holds Strong, But Overbought Conditions Raise Caution

Gold Price Bulls Hold Firm, But Overbought Conditions Suggest Caution

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

 

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

Gold Bulls Retain Control Amid US-China Trade Tensions

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

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

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

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

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

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

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

US Tariff Delay Weighs on Oil Prices

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

OPEC+ Stands Firm on Production Policy

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

Key Technical Levels to Watch

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

Read More
Gold Holds Below $2,800 Despite Intraday Recovery

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

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

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

Technical Outlook: Gold’s Uptrend Intact Despite Intraday Pullback

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

 

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

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

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

Market Drivers to Watch

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

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

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

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

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

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

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

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

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

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

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

Read More
WTI Drops Toward

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

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

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

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

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

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

Read More
EUR/USD Steady Near 1.1100, Close to Eight-Month Highs

EUR/USD Steady Near 1.1100, Close to Eight-Month Highs

EUR/USD Steady Near 1.1100, Close to Eight-Month Highs

The EUR/USD pair is holding around 1.1080 during Tuesday’s Asian session, after easing back slightly from an eight-month high of 1.1087. This minor pullback is linked to a stronger US Dollar (USD) amid a rise in risk-averse sentiment. However, the USD might face challenges ahead as the likelihood of a 25 basis point rate cut by the US Federal Reserve (Fed) in September increases.

The CME’s FedWatch Tool indicates a 23.5% chance of a 50 basis point rate cut by the Fed, with a 76.5% probability of a 25 basis point cut in September.

On Monday, Minneapolis Fed President Neel Kashkari mentioned that discussions about potential interest rate cuts in September would be appropriate, citing concerns over a weakening labor market, according to Reuters.

The upcoming Jackson Hole Economic Symposium, starting Thursday, will be closely watched, particularly for Fed Chair Jerome Powell’s speech on Friday.

In the Eurozone, investors are waiting for key data on business activity and consumer prices that could impact the European Central Bank’s (ECB) decision in September. It is expected that the ECB will gradually reduce interest rates, though policymakers remain cautious about committing to a specific path due to the risk of price pressures rising again.

On Tuesday, the Harmonized Index of Consumer Prices (HICP) from the European Monetary Union and Producer Price Index figures from Germany are set to be released, which may influence the ECB’s policy direction.

Shaun Osborne, Chief FX Strategist at Scotiabank, noted that the EUR/USD recently edged slightly above 1.1050, driven largely by broad USD losses with limited other influencing factors.

Read More
Australian Dollar Strengthens Amid Improved Risk Sentiment

Australian Dollar Strengthens Amid Improved Risk Sentiment and Hawkish RBA Stance

Australian Dollar Strengthens Amid Improved Risk Sentiment and Hawkish RBA Stance

The Australian Dollar (AUD) extended its winning streak against the US Dollar (USD) for the third consecutive day on Monday, driven by improved risk sentiment and a hawkish outlook from the Reserve Bank of Australia (RBA). Investors are now eagerly awaiting the RBA Meeting Minutes and the People’s Bank of China’s (PBoC) Interest Rate Decision on Tuesday for further insights.

RBA Governor Michele Bullock emphasized on Friday that the central bank is focused on potential upside risks to inflation and does not foresee any rate cuts in the near future. According to ABC News, Bullock stated that the RBA board believes it has found the right balance between controlling inflation and maintaining economic stability.

The US Dollar faces downward pressure due to increasing expectations that the Federal Reserve (Fed) might cut interest rates starting in September. Recent US economic data showed Retail Sales surpassing expectations, while both the Producer Price Index (PPI) and Consumer Price Index (CPI) suggested that inflation is easing. Additionally, July’s Housing Starts fell to their lowest level since 2020. This week, the market will focus on Federal Reserve Chair Jerome Powell’s upcoming speech.

Daily Market Movers: Australian Dollar Rises Amid Hawkish RBA Outlook

San Francisco Fed President Mary Daly emphasized on Sunday the need for a gradual approach to reducing borrowing costs, pushing back against concerns of a sharp economic slowdown that might justify rapid rate cuts. Meanwhile, Chicago Fed President Austan Goolsbee warned that maintaining a restrictive policy for too long could harm the labor market, highlighting the uncertainty surrounding the Fed’s next move.

In the US, Housing Starts dropped by 6.8% in July, following a 1.1% increase in June. However, the University of Michigan’s Consumer Sentiment Index rose to 67.8 in August, marking its first increase in five months and exceeding expectations.

US Retail Sales also saw a 1.0% month-over-month increase in July, rebounding from June’s 0.2% decline and surpassing the forecasted 0.3% rise. Initial Jobless Claims for the week ending August 9 came in at 227,000, better than anticipated and down from the previous week’s 234,000.

The People’s Bank of China (PBoC) announced on Thursday plans to renew the medium-term lending facility funds maturing on August 15th and conducted open market operations, lending CNY 577.7 billion (USD 80.9 billion) through seven-day reverse bond repurchase agreements at a maintained rate of 1.7%. Changes in China’s economy could significantly impact the Australian market due to close trade ties between the two countries.

US headline CPI rose by 2.9% year-over-year in July, slightly down from the 3% increase in June and below market expectations. The Core CPI, excluding food and energy, rose by 3.2% year-over-year, a slight decrease from the 3.3% rise in June but in line with forecasts.

Technical Analysis: Australian Dollar Targets 0.6700

The Australian Dollar is trading around 0.6680 on Monday, showing an upward trend within an ascending channel on the daily chart, indicating a bullish bias. The 14-day Relative Strength Index (RSI) is also moving towards the 70 mark, supporting the current bullish momentum.

On the upside, the AUD/USD pair could target the upper boundary of the ascending channel near the 0.6740 level. A breakout above this channel could push the pair towards its seven-month high of 0.6798, last seen on July 11.

For support, the lower boundary of the ascending channel around 0.6630 serves as the immediate support level, followed by the nine-day Exponential Moving Average (EMA) at 0.6618. A decline below the EMA could lead the pair to test the throwback level at 0.6575. If the pair drops below this support zone, it might signal a bearish trend, potentially leading it towards the throwback level at 0.6470.

Read More
USD/CHF Dips Below 0.8750 Amid Risk-On Sentiment

USD/CHF Dips Below 0.8750 Amid Risk-On Sentiment and Weaker US Dollar

USD/CHF Dips Below 0.8750 Amid Risk-On Sentiment and Weaker US Dollar

The USD/CHF pair is trading lower, hovering around 0.8715 during the early European session on Friday. This decline is attributed to a softer US Dollar (USD). Meanwhile, the US Dollar Index (DXY), which measures the value of the USD against a basket of major currencies, is down 0.12% for the day, trading around 102.92.

Speculation about a potential rate cut by the US Federal Reserve in September continues to weigh on the Greenback. However, expectations of deeper rate cuts have lessened due to positive US Initial Jobless Claims and strong Retail Sales data reported on Thursday. According to the CME FedWatch Tool, financial markets now see nearly an 80% chance of a rate cut in September, with expectations of 200 basis points of reduction over the next 12 months, although this outlook remains data-dependent.

In Switzerland, the Federal Statistical Office reported on Thursday that the Producer and Import Price Index remained unchanged in July 2024 compared to the previous month. The annual figure showed a 1.7% decline, a slight improvement from the previous 1.9% drop and in line with market expectations.

Diminishing fears of a US economic slowdown are boosting investor sentiment, which is putting pressure on safe-haven currencies like the Swiss Franc (CHF). However, any developments related to economic uncertainty or geopolitical tensions in the Middle East could strengthen the CHF and create headwinds for the USD/CHF pair.

Read More
EUR/USD Steadies Above 1.1000 Ahead of US

EUR/USD Steadies Above 1.1000 Ahead of US Retail Sales Data

EUR/USD Steadies Above 1.1000 Ahead of US Retail Sales Data

The EUR/USD pair is holding steady near 1.1010, consolidating its gains after pulling back from a recent seven-month high during the Asian session on Thursday. The Euro (EUR) strengthened against the US Dollar (USD) after the Eurozone’s second-quarter (Q2) Gross Domestic Product (GDP) growth met expectations.

Data released by Eurostat on Wednesday showed the Eurozone economy grew by 0.3% quarter-on-quarter (QoQ) in Q2, compared to the first quarter of the year. On an annual basis, the economy expanded by 0.6%, aligning with market expectations and potentially providing short-term support for the Euro.

Despite this positive GDP data, the growth outlook remains cautious. ING economist Bert Colijn noted that recent figures raise concerns about the strength of the service sector, leading to lowered GDP growth expectations for the remainder of the year. The European Central Bank (ECB) is anticipated to lower rates again in September, given the fragile economic outlook, after keeping key interest rates unchanged at its July meeting.

In the US, signs of cooling inflation are putting pressure on the USD, creating a favorable environment for the EUR/USD pair. The US headline Consumer Price Index (CPI) inflation dropped to 2.9% year-on-year (YoY) in July, down from 3% in June. This figure was slightly below expectations, as reported by the Labor Department on Wednesday. Core CPI, which excludes food and energy, rose 3.2% YoY, in line with market forecasts but slightly lower than the 3.3% increase seen in July.

Traders are now focused on the upcoming release of US economic data on Thursday, which includes Retail Sales, weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production. Stronger-than-expected results from these reports could support the USD and limit further gains for the EUR/USD pair.

Read More
EUR/USD Holds Below 1.1000 as Markets

EUR/USD Holds Below 1.1000 as Markets Await Eurozone GDP and US CPI Data

EUR/USD Holds Below 1.1000 as Markets Await Eurozone GDP and US CPI Data

The EUR/USD pair is trading flat around 1.0990 during the early European session on Wednesday, as traders remain cautious ahead of the release of key economic data from both the Eurozone and the US. The focus is on the Eurozone’s Gross Domestic Product (GDP) for the second quarter (Q2) and the US Consumer Price Index (CPI) for July, which are expected to provide direction for the currency pair.

On Tuesday, data from the US Bureau of Labor Statistics showed that the Producer Price Index (PPI) for final demand rose by 2.2% year-on-year (YoY) in July, down from 2.7% in June and below the expected 2.3%. On a monthly basis, the PPI increased by 0.1% in July, following a 0.2% rise in June. The Core PPI, which excludes volatile food and energy prices, rose by 2.4% YoY in July, down from 3.0% in June and lower than the market consensus of 2.7%.

The market is currently pricing in a 25 basis point (bps) rate cut by the Federal Reserve (Fed) in September, with a 50 bps cut not entirely ruled out, depending on upcoming data. Atlanta Fed President Raphael Bostic expressed increased confidence on Tuesday that the Fed can achieve its 2% inflation target, but he emphasized the need for more evidence before supporting a rate cut.

In the Eurozone, the economy is expected to grow by 0.3% quarter-on-quarter (QoQ) and 0.6% year-on-year (YoY) in Q2. If GDP growth falls short of expectations, it could weigh on the Euro (EUR) against the US Dollar (USD).

According to a Reuters poll, most economists expect the European Central Bank (ECB) to cut its deposit rate twice more this year, in September and December. However, the possibility of fewer rate cuts than previously anticipated could limit the downside for the Euro. ING’s chief Eurozone economist, Carsten Brzeski, noted that the ECB might slightly revise its inflation projections upward, which makes continued rate cuts seem contradictory.

Read More
USD/CAD Struggles to Gain Momentum

USD/CAD Struggles to Gain Momentum Near 1.3750 Amid Rising Crude Oil Prices; Focus Shifts to US PPI Data

USD/CAD Struggles to Gain Momentum Near 1.3750 Amid Rising Crude Oil Prices; Focus Shifts to US PPI Data

The USD/CAD pair is trading slightly stronger near 1.3740 during the Asian session on Tuesday, with traders largely adopting a cautious stance ahead of key US economic data releases. The US Producer Price Index (PPI) is the main event for the day, along with a speech by Federal Reserve official Raphael W. Bostic.

The US Dollar is currently in a consolidation phase, reflecting the subdued sentiment in global markets. Market participants are closely watching the PPI data, which is expected to show a year-on-year decrease to 2.3% in July from 2.6%, with Core PPI also anticipated to drop to 2.7% from 3.0%. These figures could provide critical insight into future US interest rate decisions.

Analysts at BBH Global Currency Strategy suggest there is a possibility of a 50 basis points (bps) rate cut by the Federal Reserve, contingent on upcoming data, with current market pricing indicating a 55% likelihood. If key US economic indicators show further weakness this week, it could increase the chances of the Fed implementing more aggressive rate cuts in September, potentially weakening the USD against other currencies.

Over the weekend, Fed Governor Michelle Bowman acknowledged the recent progress in reducing inflation, but noted that it remains uncomfortably above the Fed’s 2% target. She emphasized a cautious approach in considering future policy adjustments.

On the Canadian side, the Bank of Canada (BoC) is expected to implement two additional 25 bps rate cuts this year, likely in September and October, which could limit the Canadian Dollar’s upside. However, rising crude oil prices—driven by geopolitical tensions in the Middle East and expectations of a potential easing cycle by the Fed—could support the CAD. It’s important to note that higher oil prices generally benefit the CAD, as Canada is a major oil exporter to the United States.

Read More
EUR/USD Appreciates Above 1.0900

EUR/USD Appreciates Above 1.0900, Upside Limited by Middle East Tensions

EUR/USD Appreciates Above 1.0900, Upside Limited by Middle East Tensions

The EUR/USD pair has broken its four-day losing streak, trading around 1.0920 during the Asian session on Monday. Traders are anticipating the preliminary Gross Domestic Product (GDP) data for the Eurozone’s second quarter, set for release on Wednesday.

However, the Euro, being sensitive to risk, may face challenges due to escalating geopolitical tensions in the Middle East. On Sunday, Israeli Defense Minister Yoav Gallant informed U.S. Defense Secretary Lloyd Austin of potential Iranian military preparations for a significant strike on Israel. This potential retaliation follows the assassination of Hamas leader Ismail Haniyeh in Tehran in late July, as reported by Axios.

On the U.S. Dollar (USD) front, investors will likely focus on U.S. producer inflation data on Tuesday and consumer inflation figures on Wednesday. These releases will be closely watched for signs of stable price growth.

Expectations of a possible interest rate cut by the Federal Reserve (Fed) in September could weigh on the USD, providing some support for the EUR/USD pair. The CME FedWatch Tool currently indicates a 51.5% chance of a 25-basis point rate cut at the September meeting, up from a 26.0% probability a week ago.

However, comments from Federal Reserve Governor Michelle Bowman on Sunday highlighted ongoing concerns about inflation and labor market strength, suggesting that the Fed may not be ready to cut rates at their next meeting in September, as reported by Bloomberg.

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

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

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

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

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

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

Technical Outlook: Bullish Momentum Builds 

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

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

Read More
Best Forex Broker

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

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

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

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

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

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

Read More
JPY Recovers Losses vs. USD, Bullish Outlook Intact

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Conversely, on the downside:-

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

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

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

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

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

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

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

AUD Pressured by Risk Aversion, Trump’s Tariff Threats

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

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

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

China’s Economic Slowdown Adds Pressure on AUD

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

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

Technical Outlook: AUD/USD Turns Bearish Below 0.6250

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

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

Read More
US Dollar Surges as Trump Revives Tariff Threats

US Dollar Surges as Trump Revives Tariff Threats

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

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

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

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

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

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

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

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

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

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

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

Risk Aversion Rises Amid Trump’s Trade Tariff Push

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

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

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

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

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

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

Read More
NZD/USD Struggles

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

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

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

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

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

Read More
US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

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

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

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

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

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

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

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

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

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

Read More

Cryptocurrency Move Back to Support the Pack to Level

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

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

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

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

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

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

Read More

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

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

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

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

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

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

Read More

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

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

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

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

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

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

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

Read More

Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

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

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

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

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

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

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

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

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

Read More

Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

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

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

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

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

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

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

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

Read More

Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

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

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

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

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

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

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

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

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

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

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

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

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

Read More

Popular Articles

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

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

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

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

EUR/USD Drops Toward 1.1700 as US Dollar Strengthens

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

Forex Trading

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

Commodity currencies

What Are Commodity Currencies? How They Impact Your Forex Trades

AI changing Forex trading?

How is AI changing Forex trading?

Categories

,
,
,

Subscribe Now!