XAUUSD Gold price is moving in the Descending channel and the market has reached the lower high area of the channel
GOLD – XAUUSD Price Near Two-Week High Amid Falling US Bond Yields, Weakened USD Demand
Gold is moving flat against the USD due to worries about Geopolitical tensions in the Red Sea, Russia and the Ukraine War on the other side. US Domestic data has well performed in recent weeks.
Gold Price Supported by Weakening US Dollar and Geopolitical Concerns
The US Dollar faces challenges attracting buyers amid declining US Treasury bond yields, contributing to a positive environment for gold. Geopolitical risks from conflicts in the Middle East and the ongoing Russia-Ukraine war further bolster the safe-haven appeal of gold.
However, the ability of the Gold price to surpass the 50-day Simple Moving Average may be influenced by expectations of a hawkish Federal Reserve. Market participants anticipate the Fed to maintain higher interest rates, potentially limiting downside for US bond yields and favoring the USD.
The Gold price reached a two-week high as the US Dollar saw its first weekly decline in 2024. The belief that the Federal Reserve will delay interest rate cuts until the June policy meeting restricts further upward movement for gold. The January FOMC meeting minutes and statements from Fed officials indicate a cautious approach to rate cuts, emphasizing the need for confidence in falling inflation.
US Treasury bond yields, although retreating from recent highs, remain supported by the Fed’s hawkish stance, benefiting the USD. Geopolitical concerns, including Israel’s intentions against Hamas and Russia’s potential offensive in Ukraine, contribute to gold’s safe-haven support.
Investors await key US macro data, such as the Core PCE Price Index, for insights into the Fed’s future policy decisions before making directional bets on the commodity.
USDJPY – Japanese Yen Bears Persist Despite Lower Bets on BoJ Policy Shift
The Bank of Japan is delaying its monetary policy shiftment makes JPY move lower against counter pairs. The recent technical recession data in Japan’s economy makes it more dovish for JPY in the market.
USDJPY is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
The intervention of BoJ is more expected due to safe safekeeping of the JPY against Foreign pairs.
The Japanese Yen (JPY) struggles against the US Dollar (USD) due to BoJ policy delay expectations and modest USD strength. Bears dominate near-term bias amid recession fears. Speculations of Japanese intervention and ongoing geopolitical tensions limit bullish momentum for USD/JPY. Attention shifts to US New Home Sales with a focus on the US Core PCE Price Index later in the week.
Daily Market Update: Japanese Yen Faces Pressure with Reduced Bets on BoJ Policy Shift
Amid uncertainties over a Hamas ceasefire and Russia’s potential offensive against Ukraine, the Japanese Yen finds support from Japanese authorities’ warnings of market intervention. Japan’s recent entry into a technical recession dashes hopes for a Bank of Japan policy exit, impacting the JPY.
The Federal Reserve’s commitment to maintaining higher interest rates, as indicated in FOMC meeting minutes and officials’ comments, supports elevated US Treasury bond yields. This, combined with positive global equity market sentiment, weakens the safe-haven appeal of the JPY and provides a tailwind for the USD/JPY pair.
Investors await key US macro data, particularly the Core PCE Price Index, for insights into the Fed’s future policy decisions before establishing a firm near-term direction.
EURUSD – ECB Targets 2% Inflation Without Excessive Interest Rate Hikes – Natixis
The Economists at Nataxis said the ECB has to do a rate hike in upcoming meetings due to the demand for labour and goods not lowered in the Eurozone. More analysts predicted ECB has had enough rate hikes so far, but the statement is wrong according to the current situation in the Eurozone.
EURUSD is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
Contrary to many analysts’ views on the ECB’s interest rate hikes causing stagnation, Natixis economists argue against this notion.
They point out that unemployment is at its lowest, there’s still excess demand, and the ECB’s policy hasn’t led to a shortfall in aggregate demand. Thus, they believe inflation will remain above 2%, and the interest rates haven’t been raised excessively.
USDCHF – Holds Above 0.8800, Eyes on US and Swiss GDP Data
The US and Britain hit 18 Houthi targets in Yemen due to recent attacks from Iran in the Red Sea area. Swiss Q4 GDP and US Q4 GDP are scheduled this week. The Swiss Franc is strengthened against counter-pairs after the tensions rising in the Red Sea area.
USDCHF is moving in the Descending channel and the market has reached the lower high area of the channel
USD/CHF Awaits Direction from US and Swiss Q4 GDP Data
The US and Swiss Gross Domestic Product (GDP) data for Q4 are crucial for guiding the USD/CHF pair. The anticipated steady annualized US GDP growth at 3.3% is of particular interest. USD/CHF is currently trading at 0.8811, showing no change for the day.
Markets have adjusted rate cut expectations following January’s US inflation data and cautious remarks from Federal Reserve (Fed) officials. Investors now anticipate three rate cuts for 2024, down from the six expected in December.
Focus will be on the US Personal Consumption Expenditures Price Index (Core PCE) on Thursday, a key inflation measure for the Fed. Stronger data could strengthen the Greenback against peers.
Geopolitical tensions rise as the US and UK target 18 Houthi sites in Yemen, responding to increased attacks in the Red Sea and Gulf of Aden. This tension may boost the safe-haven Swiss Franc (CHF), posing a challenge for the USD/CHF pair.
Upcoming data releases include US Durable Goods Orders and Consumer Confidence on Tuesday, US Q4 GDP on Wednesday, and Swiss GDP and US Q4 Core PCE on Thursday.
USDCAD – Gains Above 1.3500 on Stronger USD, Falling Oil Prices
Canadian CPI data cooled to 2.9% last week, this data will soon open the door for the Bank of Canada’s interest rate cuts plan. Canadian Dollar moved higher due to the Oil price’s volatile movements according to the tensions movements in the Red Sea.
USDCAD is moving in an Ascending triangle pattern and the market has reached the resistance area of the pattern
Canadian CPI Slows to 2.9%, Opening Door to Rate Cuts, USD Supported by Fed’s Hawkish Stance
The Canadian Consumer Price Index (CPI) slowed more than expected to 2.9%, marking the first time inflation has entered the Bank of Canada’s (BoC) target range since mid-2021. The unexpected cooling of inflation raises the possibility of earlier interest rate cuts than anticipated by the central bank. Additionally, the decline in oil prices may weigh on the commodity-linked loonie.
Conversely, hawkish remarks from Federal Reserve (Fed) officials, emphasizing a prolonged period of higher policy rates, provide support to the US Dollar (USD). Last week, Fed Governor Christopher Waller suggested delaying interest rate cuts to gather more evidence on inflation trends.
Looking ahead, market focus will shift to the US Q4 GDP growth and Canadian Q4 Current Account. Later in the week, attention will be on the Canadian GDP and the US Core Personal Consumption Expenditures Price Index (Core PCE).
USD INDEX – USD Ends Week Unchanged, Prepares for Next Week’s PCE Data
The US Dollar moved higher after the US Domestic data performed well, FED said delaying rate cuts is possible, not earlier now. The job market shows resilient performance in the US.
USD INDEX is moving in an Ascending channel and the market has reached the higher low area of the channel
Stable USD Dampens Hopes for Early Fed Rate Cuts
The stability in the US Dollar diminishes expectations of imminent rate cuts by the Federal Reserve (Fed), with officials postponing monetary adjustments. Next week, attention turns to January’s Personal Consumption Expenditure (PCE) figures, a crucial measure of US inflation.
The robust US economy, reflected in resilient economic activity and a strong labor market with low jobless claims, poses a challenge to combating inflation. These factors deter prospects for near-term interest rate cuts and limit losses for the Greenback.
Daily Market Update: USD Holds Steady as US Economy Shows Resilience
The US Dollar sees mild gains in anticipation of next week’s January PCE figures, creating a subdued atmosphere for Friday’s session. Expectations of a near-term rate cut diminish, with the strong domestic economy and resilient labor market influencing the Fed’s stance, delaying potential easing until June.
GBPUSD – Dips to 1.2660 on Stable USD, Fed Hawkishness
Last week GFK Consumer confidence data came at -21, which is lower than expected data. The previous reading is -19. But GBP moving higher due to PMI data coming at higher numbers last week. The MUFG Bank said GBP will perform higher this year and will avoid recession in the Second half of 2024.
GBPUSD is moving in an Ascending channel and the market has reached the higher low area of the channel
USD Strengthens on Hawkish Fed, UK Consumer Confidence Weakens GBP/USD
The US Dollar (USD) maintains strength due to hawkish comments from Federal Reserve officials, exerting downward pressure on the GBP/USD pair. Weaker UK consumer confidence in February further contributes to the decline in Pound Sterling (GBP).
The GfK Consumer Confidence index for the UK in February came in at -21, below expectations of -18 and the previous reading of -19, indicating a contraction in confidence in the UK’s economic activity. However, the Pound (GBP) finds some support from mixed Purchasing Managers Index (PMI) data for February.
MUFG Bank economists analyze the GBP outlook, suggesting an improving scenario with the technical recession ending. The Bank of England (BoE) is expected to maintain a patient stance, and there is a possibility of inflation reaching the 2% target in April.
New York Federal Reserve President John C. Williams hints at potential rate cuts later in the year, emphasizing implementation only if necessary. Federal Reserve Governor Christopher J. Waller suggests delaying rate cuts for a few more months to assess January’s high inflation report.
EURAUD – China’s Commerce Ministry Rejects US Report on WTO Compliance as ‘False Accusations’
China’s commerce Ministry said the US made False allegations against China in WTO, that is Unilateralism and Hegemonic behavior in business dealings. China is strongly opposed to this comment, China doing a multilateral system of Business with unity behaviour. China sent Naval troops to the Kinmen Islands near Taiwan to protect Sea routes and sea-side Public people from poverty areas.
EURAUD is moving in the Box pattern and the market has rebounded from the support area of the pattern
The Australian Dollar moved down after the news flashed.
China’s Commerce Ministry Rejects US Claim of ‘Overcapacity’ as Unilateralism
China’s Commerce Ministry stated on Monday that the US falsely accuses China of ‘overcapacity,’ reflecting unilateralism and hegemonic behavior. The Ministry criticizes the US for ignoring China’s significant achievements in fulfilling WTO commitments and its vital contribution to the multilateral trading system and the world economy, responding to a US report on China’s WTO accession.
In a separate statement, China’s authorities announce that the Fujian Coast Guard is increasing patrols near Taiwan’s Kinmen islands to strengthen law enforcement inspections, maintain operational order in relevant sea areas, and ensure the safety of fishermen’s lives and property.
AUDUSD – AUD Stabilizes Post Intraday Losses Amid Stable USD
Australian Dollar moving lowered due to geopolitical tensions, Australian CPI data is due on Wednesday and Retail sales data is due on Thursday this week. Last week Private services data positively boosted the Australian Dollar.
AUDUSD is moving in an Ascending channel and the market has reached the higher low area of the channel
AUD Halts Winning Streak Amid S&P/ASX 200 Decline, Eyes on Economic Data
The Australian Dollar (AUD) breaks its winning streak influenced by S&P/ASX 200’s Monday dip, potentially tied to China-Taiwan tension. Despite this, the Australian money market opens higher, aligning with Wall Street’s record high and boosted by Nvidia’s strong earnings in the artificial intelligence sector.
The AUD is expected to remain subdued as investors await key economic releases, including the Australian Monthly Consumer Price Index and Retail Sales data. Positive data indicating a resurgence in private sector activity provides some support.
The US Dollar Index (DXY) stays stable after recent gains, supported by robust employment and mixed US Purchasing Managers Index (PMI) data. This strengthens the case for the Federal Reserve to maintain elevated interest rates. Market focus remains on key indicators like Q4 Gross Domestic Product, Core Personal Consumption Expenditures, and ISM Manufacturing PMI, along with the Fed Monetary Policy Report.
Daily Market Update: Australian Dollar Dips on Lower Money Market, Economic Indicators in Focus
The Australian Dollar depreciates amid a lower money market, with Judo Bank Australia’s Composite PMI indicating the first month of expansion in the private sector after five months of contraction. Services PMI rises, but Manufacturing PMI falls due to a significant drop in new orders.
TD Securities adjusts their RBA cash rate forecast, now expecting the first 25 bps cut in November. RBA’s Meeting Minutes reveal discussions on the possibility of a rate hike but acknowledge the time it would take for inflation to return to target.
China disputes US claims of ‘overcapacity,’ emphasizing unilateral actions. Chinese authorities increase patrols near Taiwan’s Kinmen islands, aiming to maintain maritime order.
Commerzbank economists revise their Fed rate cut forecast to June, citing reduced recession likelihood. New York Fed President John C. Williams suggests potential rate cuts later in the year based on economic assessments.
Federal Reserve Governor Christopher J. Waller advises postponing rate cuts for a few more months to assess inflation trends. S&P Global US Services PMI and Manufacturing PMI show mixed results in February. US Initial Jobless Claims decline to 201K, beating expectations.
NZDUSD – Retreats from Multi-Week High, Targets Mid-0.6100s on Modest USD Strength
NZ Dollar is moving down against counter pairs after the Red Sea tensions rose on Sunday. Ahead of the RBNZ monetary policy meeting this week, the NZ Dollar is moving according to the news.
NZDUSD is moving in an Ascending channel and the market has reached the higher low area of the channel
Hawkish Fed Stance and Geopolitical Risks Weigh on NZD/USD
The late January FOMC meeting minutes and recent hawkish comments from influential Federal Reserve officials suggest a reluctance to cut interest rates, supporting higher US Treasury bond yields and keeping the USD above multi-week lows. This exerts downward pressure on the NZD/USD pair.
Concerns about escalating tensions between China and Taiwan, along with geopolitical issues in the Middle East and the prolonged Russia-Ukraine conflict, dampen recent optimism. This prompts a shift away from the risk-sensitive Kiwi, although downside potential for NZD/USD appears cushioned ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy meeting on Wednesday.
Additionally, investors this week will focus on key US macro data, including Prelim Q4 GDP and the Core PCE Price Index, with potential impacts on the Fed’s future policy decisions. This influence on the USD could provide impetus to the NZD/USD pair. Traders on Monday will look to the US New Home Sales data for short-term opportunities during the North American session.
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