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Forex Today: US data dominate the mood in the FX space

3 June 2024, 22:07

The loss of impetus in the US manufacturing sector sparked a deeper pullback in the Greenback and supported further the recovery of the risk-associated assets at the beginning of a week ruled by the ECB event and US Nonfarm Payrolls.

Here is what you need to know on Tuesday, June 4:

The USD Index (DXY) dropped markedly and flirted with three-week lows near the 104.00 neighbourhood. On June 4, Factory Orders take centre stage seconded by the JOLTs Job Openings and the RCM/TIPP Economic Optimism Index.

EUR/USD advanced for the third session in a row and challenged the key 1.0900 barrier amidst generalized Dollar weakness. The release of Germany’s labour market report and EMU’s Consumer Inflation Expectations will be at the centre of the debate on the domestic docket on June 4.

GBP/USD advanced to just pips away from the key 1.2800 hurdle, or multi-week highs, on Monday. The BRC Retail Sales Monitor is expected across the Channel on June 4.

The weaker Dollar and diminishing US yields prompted USD/JPY to recede to multi-session lows in the sub-156.00 region at the beginning of the week. In Japan, a JGB 10-year Auction is only due on June 4.

The increasing selling pressure in the Greenback motivated AUD/USD to advance to the proximity of the 0.6700 mark. On June 4, Business Inventories, Current Account and final Retail Sales are all due in Oz.

WTI prices receded for the third consecutive week and broke below the $77.00 mark per barrel on Monday, as traders digested the bearish tone from the OPEC+ meeting on Sunday.

Gold prices charted a strong advance to the $2,350 region on the back of the intense sell-off in the Dollar and declining US yields across the curve. By the same token, Silver followed suit and reversed three consecutive sessions of losses.

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Forex Today: Dollar holds firm, focus turns to inflation data

22 September 2023, 20:59

Next week, markets will continue to digest the outcomes of recent central bank meetings. Additionally, market participants will closely monitor the release of economic data, with a particular focus on inflation figures from the Eurozone and the US Core Personal Consumption Expenditure (PCE) index.

Here is what you need to know for next week:

The US Dollar Index recorded its tenth consecutive weekly gain, ending around 105.50. The DXY continues to trend upward, supported by US economic data and the recent Federal Reserve (Fed) meeting.

During the FOMC meeting, interest rates were left unchanged in the range of 5.25% to 5.50%. In terms of macroeconomic projections, most members still see the possibility of further rate hikes later this year. Economic data in the US showed mixed results, with housing data coming in weaker while Jobless Claims dropped to the lowest level since January.

Next week, the key focus in the US will be on Friday's release of the Fed's preferred measure of consumer inflation, the Core Personal Consumption Expenditure (PCE) Price Index. It is expected to show a decline from an annual rate of 4.2% to 3.9%. The third estimate of Q2 GDP will be released on Thursday.

The Japanese yen was among the worst-performing major currencies. The Bank of Japan (BoJ) left its monetary policy unchanged at the September meeting, with Governor Ueda stating that any change would only occur when the achievement of 2% inflation is in sight. Japan will release several economic indicators next Friday, including the Tokyo Consumer Price Index, Unemployment Rate, Industrial Production, Retail Sales, Consumer Confidence, and household spending for August. However, the focus will remain on the potential intervention from Japanese authorities to curb the yen's weakness. USD/JPY reached its highest level in decades above 148.00, supported by higher US yields and the BoJ's policy stance.

The British Pound lagged following the Bank of England's decision to keep interest rates unchanged after a slowdown in inflation in August. Next Friday, the UK will release a new estimate of Q2 GDP growth. GBP/USD declined for the third consecutive week, reaching its lowest level since March at 1.2232, before closing around 1.2260. The pair has strong support around 1.2200. EUR/GBP surged from below 0.8600 to 0.8700, marking its biggest weekly gains since February.

EUR/USD finished the week near 1.0650 after hitting fresh monthly lows at 1.0614. The Eurozone PMI provided some relief with a rebound on Friday. Inflation data will be crucial next week, with Spain and Germany kicking off with CPI on Thursday, followed by France, Italy, and the Eurozone on Friday.

The Swiss franc lost ground against major currencies after the Swiss National Bank (SNB) left its key interest rate unchanged at 1.75%. The Swissy was also influenced by the dovish stance of the European Central Bank. USD/CHF accelerated to the upside, breaking decisively above 0.9000 to its highest level since June. EUR/CHF surged from around 0.9550 to 0.9660.

AUD/USD continued to trade within a range between 0.6500 and 0.6350. Australia will release the Monthly Consumer Price Index on Wednesday, with the annual rate expected to rebound from 4.9% in July to 5.2% in August. Retail sales data will be released on Thursday.

The New Zealand Dollar was the best-performing major currency during the week. NZD/USD gained almost 1%, rising to 0.5975 but was unable to reclaim the 0.6000 level.

On a volatile week for metals market, Gold ended the week flat around $1,925 after recovering ground on Friday. Silver remained above $23.00 and closed around $23.50.

- from HFM

HFM - World Leader in Online Trading | Regulated Broker HFM (Formerly known as HotForex) is a multi-asset regulated, licensed global broker, providing trading services & facilities to both retail & institutional clients.