XAUUSD Gold price is moving in an Descending channel and the market has reached the lower high area of the channel
GOLD – XAUUSD Gains Momentum at $2,020; Eyes on FOMC Minutes.
Global central banks are buying more Gold in the reserves, to protect them as hedge funds due to war fears in the Red Sea and Gaza. FOMC meeting minutes are scheduled this week.
Stronger US Data Weakens Rate Cut Expectations, Providing Support for USD. Global Central Banks Consider Gold for Portfolio Hedging Amid Geopolitical Tensions. FOMC Meeting Minutes and US PMI Release Awaited for Gold Price Direction.
EURUSD – Flat on Holiday Monday; Investors Eye Late-Week European PMIs.
European and US PMI is scheduled this week, Euro pairs are mostly moved on the upcoming results.
EUR/USD Awaits Data: Investors Eye European and US PMIs, FOMC Meeting Minutes.
EURUSD is moving in the Descending channel and the market has reached the lower high area of the channel
Market Digest: Quiet Monday with US Presidents’ Day Holiday; FOMC Minutes on Wednesday.
Investors Watch for Clues on Fed’s Rate Cut Timing; CME’s FedWatch Tool Shows 75% Chance of June Cut.
European Consumer Confidence Expected to Recover; FOMC Meeting Minutes and Thursday’s PMIs Awaited.
Euro Area Composite PMI Predicted Higher at 48.5; US S&P PMIs Expected to Soften in February.
USDJPY – Japan’s Mimura: Government in Continuous Communication for FX Intervention
Japan finance ministry official Atsushi Mimura said FX intervention will be implemented only when all countries coordinate and support us. FX intervention needed means that we sell assets of FX reserves like Bonds and savings. We carefully safe and maintained the FX liquidity in the reserve area.
USDJPY is moving in an Ascending channel and the market has reached the higher high area of the channel
Japanese Finance Ministry Official Mimura: Government Constantly Coordinates for FX Intervention; Emphasizes Safety and Liquidity in FX Reserves Management, Willing to Sell Assets When Needed.
USD Index: USD Flat at Week’s Start, FOMC Minutes in Focus.
After the rising numbers of PPI data in recent months in the US economy and the recent rise in inflation data, FED is going to hold the rates at the next meeting as forecasted. The US Dollar rose against counter pairs after the supportive US domestic data.
USD index is moving in the Ascending channel and the market has fallen from the higher high area of the channel
With Increasing PPI, US Dollar Index May Rise Further; Hot Inflation Figures Could Influence Cautious Fed Stance. FOMC Minutes and Comments from Fed Officials in Spotlight.
Daily Market Recap: US Dollar Unchanged as Markets Digest Last Week’s Data, Including Declines in Retail Sales and Industrial Production. Higher-than-Expected PPI in January Raises Expectations for Fed’s Easing Cycle. Focus on FOMC’s January Meeting Minutes on Wednesday. Odds for March Cut Drop to 20%, Shifting Market Sentiment Toward June Easing.
USDCHF – Price Consolidates Above 0.8800.
The Swiss Franc moved lower after the investors expected the SNB to cut the rates sooner than expected. This is due to inflation being well below the target of 2%.
USDCHF is moving in an Ascending channel and the market has reached the higher high area of the channel
USD Index Struggles Despite Expectations of Unchanged Fed Rates. FOMC Minutes Awaited for US Dollar Guidance.
Long-term Pressure on Swiss Franc Anticipated as SNB Eyes Rate Cut Cycle Amid Consumer Price Inflation Slowdown.
GBPUSD – Dips to 1.2580 on Stronger USD; Awaits UK PMI and FOMC Minutes.
UK retail sales data has come in increasing numbers in recent months, this put pressure on the Bank of England to maintain the rates higher. Recession will be avoided due to demand in Labour growth and rising retail sales.
GBPUSD is moving in the Descending channel and the market has fallen from the lower high area of the channel
ANZ Forecasts Fed Rate Cuts from July 2024; CME FedWatch Tool Shows 53% Chance of June Cut. Fed Officials’ Remarks on Early Rate Cuts Weaken US Dollar.
San Francisco Fed President Mary C. Daly sees three rate cuts as reasonable for 2024; St. Louis Fed President James Bullard suggests March rate cut consideration.
Bank of England (BoE) Expected to Maintain Interest Rates Amidst UK Economic Challenges. Services PMI Data Anticipated to Show Slight Moderation, Manufacturing Sector Improvement in February.
AUDUSD – Stable as USD Holds, Awaits Wednesday’s FOMC Minutes
RBA meeting minutes outcome is rate steady or rate hike in the upcoming quarters. The prolonged rate higher in the Australian economy impacted consumer spending, higher taxes and business. Inflation will come to our target of 2% in 2025. The Australian Dollar moved stronger after the news today.
AUDUSD is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
Higher US Treasury yields boost the Greenback, exerting pressure on AUD/USD. The Aussie currency faces downward pressure from a weaker money market, and the S&P/ASX 200 index halts its winning streak due to declines in mining and energy stocks amid weaker commodity prices.
The Australian Dollar remains unresponsive to the Reserve Bank of Australia’s (RBA) February meeting minutes, where the board discussed the possibility of a 25 basis points rate hike or maintaining the status quo. Although data provided confidence in inflation returning to target, the board acknowledged it would “take some time” before being sufficiently confident. Hence, another rate hike is not ruled out.
The US Dollar Index (DXY) rises as markets return from a holiday-extended weekend, and investors eagerly await the release of the US Federal Open Market Committee (FOMC) Minutes on Wednesday. ANZ predicts the Federal Reserve (Fed) will start rate cuts from July 2024, and there’s a 53% probability of a 25 basis points rate cut in the June meeting according to the CME FedWatch Tool.
AUD Falls on Stronger USD: Daily Market Recap
– ANZ-Roy Morgan Consumer Confidence inches up to 82.8 from 82.6, setting a record of 55 consecutive weeks below 85.
– Westpac predicts a resilient Australian economy, expects RBA to maintain current policy in 2024, and adopt a less restrictive approach in 2025.
– People’s Bank of China (PBoC) holds one-year Loan Prime Rate at 3.45%, lowers five-year LPR by 25 basis points to 3.95%.
– Premier Li Qiang emphasizes consistent policies; PBoC keeps Medium-term Lending Facility (MLF) rate steady at 2.5%.
– Federal Reserve’s dot plot expects 75 basis points in rate cuts in 2024, while the market prices in approximately 89 basis points.
– San Francisco Fed President Mary C. Daly suggests three rate cuts in 2024; St. Louis Fed President James Bullard proposes lowering rates in March.
– Preliminary Michigan Consumer Sentiment Index improves to 79.6, below the expected 80.0.
– US Core Producer Price Index (YoY) rises to 2% in January, beating the expected 1.6%.
– US Producer Price Index (YoY) records 0.9%, surpassing the anticipated 0.6%.
– US Building Permits (MoM) decline to 1.470 million in January, missing the expected rise to 1.509 million.
USDCAD – Canada CPI Preview: January Inflation Forecasted at 3.3% Pace
Canadian CPI data for January is expected to print at 3.3% from 3.4% printed in December month. The Bank of Canada Governor Tiff Mackhelm said shelter costs in Canada are building the inflation rates higher in Canada. We are maintaining the rates in the near term until the inflation will slow down to our target.
USDCAD is moving in an Uptrend line and the market has reached the higher low area of the trend line
Canada’s Inflation Outlook:
Economists project a 3.3% annual increase in the Canadian CPI for January, slowing from the 3.4% growth in December. On a monthly basis, CPI inflation is expected to rebound to 0.4%, following a 0.3% decline in December. December saw a 0.1% month-on-month increase in Core CPI.
In tandem with the CPI data, the Bank of Canada (BoC) will release its closely monitored Core Consumer Price Index, excluding volatile items. In December, BoC’s annual Core CPI rose to 2.6%, while the monthly figure dropped by 0.5%.
The anticipated slowdown in headline annual CPI inflation is attributed to lower energy and food prices. However, core CPI is expected to remain resilient, influenced by BoC’s higher borrowing costs leading to increased mortgage interest and rents.
TD Securities analysts predict a 0.2pp drop to 3.2% y/y in Jan for headline CPI, with a 0.4% m/m increase. The mixed tone is expected, and underlying inflation persistence sets a high bar for a dovish shift from the BoC in March.
According to Canada’s overnight index swaps (OIS) curve, the first-rate cut by the BoC is likely in July. BoC Governor Tiff Macklem suggests a shift in policy discussion towards how long it should remain restrictive rather than its restrictiveness. Macklem emphasizes the slow path to 2.0% inflation, warning of risks, especially with shelter prices contributing significantly to above-target inflation.
XTIUSD – General: WTI Rises to $78.30 on Houthi Strikes in Red Sea.
US Oil prices moved higher after the Iran-backed Houthi rebels attacked UK cargo vessels in the Red Sea. Now European Union decided to put Naval Warships to protect the Cargo ships and vessels from Terrorist groups in the Red Sea.
XTIUSD Oil price is moving in the Descending triangle pattern and the market has rebounded from the support area of the pattern
Heightened Middle East Supply Disruption Threat Bolsters Crude Oil Prices.
The Iran-led Houthi group launches drone and missile strikes on shipping vessels, including the Belize-flagged Rubymar, prompting crew evacuation off Yemen’s coast.
In response, the European Union (EU) initiates a naval mission to protect Red Sea shipping lanes from further Houthi attacks, deploying warships and early warning systems.
Crude oil prices respond positively to China’s economic news, as the People’s Bank of China (PBoC) maintains the one-year Loan Prime Rate (LPR) at 3.45% but reduces the five-year LPR to 3.95% to support the economy. Additionally, China sees a notable surge in annual tourism revenues during the Lunar New Year holiday.
NZDUSD – Jumps to 0.6140 on Positive Business NZ PSI; USD Holds Steady.
NZ PSI services sector data came at 52.1 in January from 48.8 in December month. NZ PMI reading data came at 47.3 versus 43.4 reading.
NZDUSD is moving in the Box pattern and the market has reached the resistance area of the pattern
NZ Dollar moved higher against counter pairs after the reading was published.
Business NZ PSI Rises to 52.1, Indicating Service Sector Expansion. RBNZ Governor Orr Stresses 2.0% Inflation Target at NZ Economics Forum. Market Anticipates No Rate Adjustments in Upcoming Fed Meetings; 52% Probability of June Cut. USD Loses Gains Despite Positive US PPI, Boosting NZD/USD Pair.
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