Market Trading News and Research from 28 March 2024

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28.03.2024
11:22
Italy Producer Price Index (MoM): -1% (February) vs -1.7%
11:22
Italy Producer Price Index (YoY) down to -10.8% in February from previous -10.7%
11:19
USD/JPY consolidates above 151.00 ahead of US core PCE Inflation for fresh cues USDJPY
  • USD/JPY trades back and forth above 151.00 ahead of the Fed’s preferred inflation gauge.
  • Risk-perceived currencies are facing the heat of uncertainty ahead of the US core PCE for February.
  • Investors need more clarity about BoJ’s intervention to support the Japanese Yen.

The USD/JPY pair trades sideways in a narrow range around 151.30 in the London session on Thursday. The asset is expected to remain stuck in a tight range as investors are expected to build fresh positions after getting more clarity on the Bank of Japan’s stealth intervention plans in the FX domain to support weakening Japanese Yen. Also, the United States core Personal Consumption Expenditure Price Index (CPE) data, which will be published on Friday, is expected to keep investors on the sidelines.

The annual inflation gauge is expected to have grown at a steady pace of 2.8%. The monthly underlying inflation data is forecasted to have increased slowly by 0.3% from January’s reading of 0.4%. Investors will keenly focus on the inflation data to gauge when the Federal Reserve (Fed) may begin trimming interest rates.

An asset-specific action is observed in global markets as risk-sensitive currencies have been hit hard amid uncertainty ahead of US core PCE for February. While S&P 500 futures are unchanged. The US Dollar Index (DXY) refreshes six-week high at 104.72. 10-year US Treasury yields have rebounded to 4.23%.

The US Dollar strengthens as Fed Governor Christopher Waller’s commentary on the interest guidance negatively impacts Fed expectations for rate cuts in the June meeting. Fed Waller said there is no need to rush for policy rate cuts due to sticky price pressures and a strong economic outlook. Waller added, “Further progress expected on lowering inflation "will make it appropriate" for the Fed to begin reducing the target range for the federal funds rate this year," reported Reuters.

The expectations for BoJ’s intervention in the FX domain have increased as investors lack confidence that Japan’s central bank will not be able to move forward with positive interest rates due to an uncertain wage growth outlook. However, the summary of opinions at the BoJ's March meeting, released on Thursday, showed that many policymakers saw the need to go slow in phasing out ultra-loose monetary policy, Reuters reported.

USD/JPY

Overview
Today last price 151.4
Today Daily Change 0.08
Today Daily Change % 0.05
Today daily open 151.32
 
Trends
Daily SMA20 149.67
Daily SMA50 149.28
Daily SMA100 147.6
Daily SMA200 146.8
 
Levels
Previous Daily High 151.97
Previous Daily Low 151.03
Previous Weekly High 151.86
Previous Weekly Low 148.91
Previous Monthly High 150.89
Previous Monthly Low 145.9
Daily Fibonacci 38.2% 151.39
Daily Fibonacci 61.8% 151.61
Daily Pivot Point S1 150.91
Daily Pivot Point S2 150.49
Daily Pivot Point S3 149.96
Daily Pivot Point R1 151.86
Daily Pivot Point R2 152.39
Daily Pivot Point R3 152.8

 

 

11:01
Ireland Retail Sales (MoM) declined to -2% in February from previous 0.5%
11:00
Ireland Retail Sales (YoY): 1.1% (February) vs previous 2.7%
10:58
USD/JPY: Japanese authorities may intervene somewhere in the 153.00-155.00 range – ING USDJPY

Speculation over Japanese FX intervention remains high. Economists at ING analyze the USD/JPY outlook after the pair touched a multi-decade high near 152.00 on Wednesday.

Higher US rates and low volatility weigh

We suspect Japanese authorities would pull the trigger were USD/JPY to burst through the 152.00 area, intervening perhaps somewhere in the 153.00-155.00 range. 

With US interest rate volatility collapsing and much demand for the carry trade, it is, however, hard to see much of a market-led move lower in the USD/JPY pair.

 

10:30
Belgium Consumer Price Index (MoM) declined to 0.55% in March from previous 0.71%
10:30
Belgium Consumer Price Index (YoY): 3.18% (March) vs previous 3.2%
10:24
Gold price holds strength ahead of US core PCE inflation
  • Gold price hovers around $2,200, exhibiting strength ahead of US core PCE Price Index data.
  • The US Dollar refreshes to a six-week high amid cautious market sentiment.
  • 10-year US bond yields rise as Fed rate cut bets for June have dropped.

Gold price (XAU/USD) holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core Personal Consumption Expenditure (PCE) Price Index data for February, which will be published on Friday. 

The Federal Reserve (Fed) could dial back rate cut expectations if the underlying inflation data suggests price pressures persist. Such a scenario would lead to an increase in yields on interest-bearing assets, such as Treasury bonds, whose appeal strengthens in a high-inflation environment. On the contrary, softer-than-expected inflation could boost expectations for a Fed rate cut in the June meeting, and support the broad narrative of three rate cuts for overall 2024. 

The Fed is expected to maintain a cautious approach to rate cuts as initiating them too soon or lowering them too much could reinforce price pressures again.  Meanwhile, a delay in cutting interest rates could result in unnecessary pressure on the labor market and the economy.

The US Dollar Index (DXY), which measures the US Dollar’s value against six major currencies, refreshes to a six-week high at 104.72 amid dismal market sentiment ahead of the release of the Fed’s preferred inflation gauge.

Daily digest market movers: Gold price rises slightly while US Dollar refreshes six-week high

  • Gold price holds gains slightly below $2,200 ahead of the US core PCE Price Index data for February. The Federal Reserve’s preferred inflation gauge is expected to have grown at a steady pace of 2.8% on year. The monthly underlying inflation data is forecasted to have increased by 0.3%, slowing from January’s 0.4% advance. Investors will keenly focus on the inflation data to gauge when the Fed may begin trimming interest rates.
  • Stubborn inflation data could allow the Fed to maintain a hawkish rhetoric. Fed policymakers have been reiterating that rate cuts are only appropriate when they are convinced that inflation will return sustainably to the 2% target. Sticky price pressures, in turn, would weaken the Gold’s appeal as it would increase the opportunity cost of investing in it. 
  • According to the CME FedWatch tool, traders are pricing in a 60% chance that a rate cut will be announced in June. The chances for Fed pivoting to rate cuts in June have dropped from 70% on Thursday after a slightly hawkish guidance from Fed Governor Christopher Waller.
  • Christopher Waller said in a speech at an Economic Club of New York on Wednesday that the Fed needs not to rush for rate cuts. However, he keeps hopes of rate cuts alive saying, “Further progress expected on lowering inflation will make it appropriate for the Fed to begin reducing the target range for the federal funds rate this year," reported Reuters.

Technical Analysis: Gold hovers close to $2,200 resistance

Gold price trades close to the crucial resistance of $2,200. The precious metal aims to recapture the all-time highs slightly above $2,220. All short-to-long term Exponential Moving Averages (EMAs) are sloping higher, suggesting strong near-term demand.

The Gold price could face a hurdle near $2,250, which coincides with the 161.8% Fibonacci extension, after breaking above the resistance of $2,220. The Fibonacci tool is plotted from December 4 high at $2,144.48 to December 13 low at $1,973.13. On the downside, December 4 high at $2,144.48 will support the Gold price bulls.

The 14-period Relative Strength Index (RSI) rebounds after cooling down to 64.00 from the extremely overbought zone.

 

Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

 

10:18
Oil Price Analysis: Consolidating within a short-term uptrend
  • WTI Oil is in a short-term uptrend within a rising price channel. 
  • The commodity has pulled back and is consolidating – its next move could be critical. 
  • A move below the range lows could flip the trend bearish; a rise above the March high bullish.  

WTI Oil price (OIL) is trading within an ascending channel whose rising peaks and troughs indicate the commodity is in a short-term uptrend. 

Given the old adage that “the trend is your friend till the bend at the end,” the price is favored to continue rising in the short-term until the weight of evidence suggests it has reversed. 

WTI Oil: 4-hour chart

The trend on longer time frames is less clear, suggesting some caution needs to be taken in adopting an overly bullish view. 

On March 19, Oil price peaked at $83.05 before rolling over. A combination of resistance from the 100-week Simple Moving Average (SMA) (not shown) and the top of the price channel were probably the catalysts for the rejection. 

Oil price has since yo-yoed in a range between roughly $80.20 and $82.00. 

Although the pair retains its short-term uptrend intact it is at risk of reversing lower unless it can print a higher high. 

A break below the $80.20 range lows would indicate peaks and troughs were now in a  falling pattern rather than rising, and that the short-term trend was bearish. This would start to push the odds in favor of bearish bets. 

Such a move would probably lead to a decline back down within the channel to an initial target at $78.60-80 where a combination of major Moving Averages converge, supplying dynamic support for the commodity. 

Alternatively a break above the $83.05 highs would indicate a continuation of the short-term uptrend, with the next possible target in the upper $83.00s, perhaps $83.90 to put a number on it.  

 

10:14
Gold Price Forecast: Even Fed hawkish comments do not seem to be affecting XAU/USD – Commerzbank

Gold is holding up well near the $2,200 mark. Economists at Commerzbank analyze the yellow metal’s outlook.

The market seems to be underestimating the risk that rate cuts will come later and be less substantial

Even hawkish comments from the Federal Reserve do not seem to be affecting the precious metal. Only Wednesday, Fed Governor Christopher Waller stressed that recent economic data would warrant a delay or a reduced amount of interest rate cuts. The market therefore seems to be underestimating the risk that US rate cuts will come later and be less substantial. 

Although the median of the top Fed officials' rate projections was unchanged at the last meeting, the distribution showed that only a few of them would have had to upgrade their rate expectations to push the median higher as well.

 

10:02
Italy Trade Balance non-EU increased to €6.739B in February from previous €2.889B
09:46
ECB’s Panetta: The conditions to start easing monetary policy are materializing

European Central Bank (ECB) executive board member Fabio Panetta said on Thursday, “the conditions to start easing monetary policy are materializing.”

Additional quotes

Restrictive policy is dampening demand and contributing to a rapid fall in inflation.

The risks to price stability have diminished.

Market reaction

Downbeat German data combined with the dovish remarks are weighing on the Euro, as EUR/USD currently loses 0.42% on the day to trade at 1.0780.

09:46
DXY to pop through 104.50 towards 105.00 – ING

The US Dollar (USD) is no rush to sell off, economists at ING say.

Short-dated interest rate differentials are moving in favour of the Dollar

As we head into the end of the quarter, one of the defining narratives remains the normalisation of monetary policy in the G10 space and the current signals that the Fed may be a late arrival. This follows last week's rate cut in Switzerland, Wednesday's Riksbank meeting near-promising a rate cut in May or June, and comments from the RBNZ Governor that New Zealand was preparing to normalise policy. As a result, short-dated interest rate differentials are moving in favour of the Dollar.

It is hard to speculate against the Dollar in the G10 space, and barring any significant quarter-end rebalancing, it feels like the greater risks are DXY popping through 104.50 towards 105.00.

 

09:39
USD/CAD edges higher as Fed cautions against hasty rate cuts, Oil holds the line USDCAD
  • USD/CAD pushes higher on USD strength after Fed officials advocate caution in cutting interest rates. 
  • Oil remains bid despite higher inventories as official government figures moderate previous data. 
  • BoC could turn dovish at the next meeting on lower inflation and negative growth outlook. 

USD/CAD continues channeling higher, up by almost a tenth of a percent and trading above 1.3600 on Thursday. The pair is benefiting from a general appreciation in the US Dollar (USD) on the back of expectations the Federal Reserve (Fed) will delay cutting interest rates, a key driver of FX markets. 

US Dollar versus Canadian Dollar: 4-hour chart

The outlook for Canada’s largest export Crude Oil, has hampered the Canadian Dollar (CAD) meanwhile, after a surprise rise in US stockpile data denoted flagging demand. Although WTI Oil is rising on Thursday – due to a more official source of stockpile data from the Energy Information Administration (EIA) moderating the initial data – Crude’s outlook remains uncertain. 

Fed officials caution against hasty rate cuts 

Overall stronger growth data and stickier-than-expected inflation in the US have led a series of Fed speakers to question whether the conditions are right for a rate cut in June. With interest rates now expected to remain higher for longer, the US Dollar (USD) has gained a boost, since higher interest rates tend to attract greater inflows of foreign capital. 

Policymakers in Canada have been less vocal about cutting interest rates and at the last Bank of Canada (BoC) meeting BoC Governor Tiff Macklem said it was still too early to consider cutting interest rates as more time was needed to ensure inflation had come down to the BoC’s 2.0% target. 

BoC may change tone

The divergence in policy stances between the two central banks would normally be expected to favor the Canadian Dollar over the US Dollar (bearish for USD/CAD), however, since Maclem spoke, Canadian inflation data for February has shown a fairly steep drop. 

The core Consumer Price Index, which is the metric most central banks favor for targeting price stability, fell to 2.1% YoY in February, from 2.4% in January, placing it just a tenth of a percent above the BoC’s target, according to data from Statistics Canada. 

Headline inflation also slowed to 2.8% from 2.9% and undershot expectations of 3.1%. The cooling inflation data suggests the BoC could shift their stance from its current “mute” setting at the next policy meeting on April 10. 

Apart from disinflation there may be other reasons why the BoC may feel a need to start cutting interest rates. Canada’s economy is in comparatively worse shape than the US’s and it could do with the panacea of lower interest rates to help stimulate activity. 

Canada’s  GDP growth rate is slower, it has higher unemployment and – in the words of BoC Assistant Deputy Governor Carolyn Rogers – suffers from “low productivity” and “poor levels of investment”. 

In addition, the BoC’s policy rate is lower at 5.0% than the fed funds rate of 5.25%-5.50%, a differential which mildly favors the US Dollar over the CAD.

 

09:30
South Africa Producer Price Index (MoM) below expectations (0.9%) in February: Actual (0.5%)
09:30
South Africa Producer Price Index (YoY) came in at 4.5% below forecasts (4.9%) in February
09:11
USD/JPY: Uptrend likely to extend on a break past 152.00 – SocGen USDJPY

USD/JPY is trading sideways near 151.35. Economists at Société Générale analyze the pair’s outlook.

150.20 is first support

USD/JPY is in vicinity to the upper limit of its range since October 2022 near 152.00 which has remained a crucial graphical level.

Daily MACD is anchored within positive territory denoting prevalence of upward momentum.

The pair has evolved within a brief pause since last week; the lower end of this consolidation at 150.20 is first support.

In case the pair overcomes 152.00, the uptrend is likely to extend. Next potential objectives could be located at projections of 153.10 and 155.50.

09:01
Eurozone M3 Money Supply (3m) rose from previous -0.2% to 0.2% in February
09:01
Eurozone M3 Money Supply (YoY) registered at 0.4% above expectations (0.3%) in February
09:00
Eurozone Private Loans (YoY) came in at 0.3%, below expectations (0.4%) in February
09:00
Italy Consumer Confidence came in at 96.5 below forecasts (97.5) in March
09:00
Italy Business Confidence registered at 88.6 above expectations (87.6) in March
08:55
Germany Unemployment Change came in at 4K, below expectations (10K) in March
08:55
Germany Unemployment Rate s.a. meets expectations (5.9%) in March
08:54
NZD/USD plummets to its lowest level since November, seems vulnerable while below 0.6000 NZDUSD
  • A combination of factors drags the NZD/USD pair to a fresh YTD trough on Thursday.
  • Rising bets for a rate cut by RBNZ in July weigh on the Kiwi amid a softer risk tone.
  • Sustained USD buying exerts additional pressure and contributes to the ongoing slide.

The NZD/USD pair comes under heavy selling pressure on Thursday and continues losing ground through the first half of the European session. The downward trajectory drags spot prices to the 0.5970-0.5965 region, or the lowest level since November 17, and is sponsored by a combination of factors.

The New Zealand Dollar (NZD) weakens after the business outlook survey by ANZ Bank showed weakening activity indicators and a slight fall in inflation pressures. Moreover, markets are pricing in an almost 50% chance the Reserve Bank of New Zealand (RBNZ) could cut rates as early as July. This, along with a fresh bout of the US Dollar (USD) buying, turn out to be key factors exerting downward pressure on the NZD/USD pair.

The USD Index (DXY), which tracks the Greenback against a basket of currencies, climbs to over a one-month peak in the wake of Federal Reserve (Fed) Governor Christopher Waller's hawkish comments on Wednesday, which tempered rate cut bets. This remains supportive of elevated US Treasury bond yields, which, along with a softer risk tone, is seen benefitting the safe-haven buck and driving flows away from the risk-sensitive Kiwi.

With the latest leg down, the NZD/USD pair now seems to have confirmed a breakdown through the weekly trading range and the 0.6000 psychological mark. This, in turn, favours bearish traders and supports prospects for a further near-term depreciating move. market participants now look to the US economic docket – featuring the final Q4 GDP print, Weekly Initial Jobless Claims, Pending Home Sales and revised Michigan Consumer Sentiment Index.

NZD/USD

Overview
Today last price 0.5968
Today Daily Change -0.0036
Today Daily Change % -0.60
Today daily open 0.6004
 
Trends
Daily SMA20 0.6091
Daily SMA50 0.6109
Daily SMA100 0.6136
Daily SMA200 0.6074
 
Levels
Previous Daily High 0.6011
Previous Daily Low 0.5987
Previous Weekly High 0.6107
Previous Weekly Low 0.5989
Previous Monthly High 0.6219
Previous Monthly Low 0.6037
Daily Fibonacci 38.2% 0.6002
Daily Fibonacci 61.8% 0.5996
Daily Pivot Point S1 0.5991
Daily Pivot Point S2 0.5977
Daily Pivot Point S3 0.5967
Daily Pivot Point R1 0.6015
Daily Pivot Point R2 0.6025
Daily Pivot Point R3 0.6039

 

 

08:41
NZD/USD: It is hard to see where a good news story is going to come from – ANZ NZDUSD

NZD/USD is a shade below 0.6000. Economists at ANZ Bank analyze Kiwi’s outlook. 

Broader FX markets are likely to be illiquid and quiet into Easter

As we wind down for Easter, there’s no sign of global FX shifting away from their USD-centric beat ahead of a host of key US data including the core PCE deflator, ISM Mfg survey and JOLTS data between now and the middle of next week. 

Locally, as fiscal challenges mount and commentators become more wary on the outlook for NZ, it’s hard to see where a good news story is going to come from.

Support 0.5750/0.5970 – Resistance 0.6255/0.6500

08:39
USD/MXN snaps its three-day losing streak, advances to near 16.60
  • USD/MXN gains ground on risk aversion ahead of US GDP Annualized.
  • Mexico’s Jobless Rate stood at 2.5% in February, against the expected 2.8%.
  • The higher US Treasury yields contribute support for the US Dollar.

USD/MXN halts its three-day losing streak, advancing to near 16.60 during the European hours on Thursday. However, the Mexican Peso received upward support, which could be attributed to the softer Jobless Rate, consequently, undermining the USD/MXN pair.

The unemployment rate in Mexico decreased to 2.5% from 2.7% in the same period a year earlier, surpassing market forecasts of 2.8%. The number of unemployed individuals decreased by 137,000 to 1.5 million, while the number of employed individuals rose by 1.1 million to 59.4 million.

This situation allows the Bank of Mexico (Banxico) to continue implementing tight borrowing conditions as a means to address persistent inflationary pressures. Inflation has consistently exceeded expectations, as observed in both headline and core measures during the mid-March assessment.

Traders adopt a cautious stance ahead of the release of Gross Domestic Product Annualized and Initial Jobless Claims data scheduled for Thursday, with Personal Consumption Expenditures set to be revealed on Friday.

The US Dollar Index (DXY) has risen to nearly 104.60, supported by higher yields on US coupon bonds, with the 2-year and 10-year yields standing at 4.62% and 4.21%, respectively, at the time of writing. However, conflicting views among members of the Federal Open Market Committee (FOMC) regarding monetary policy easing are contributing to market uncertainty.

Federal Reserve Board Governor Christopher Waller continues to advocate for a cautious approach toward rate cuts, citing persistent inflation data. Atlanta Fed President Raphael Bostic shares this sentiment, anticipating only one rate cut this year and warning against premature reductions that could exacerbate economic disruptions.

USD/MXN

Overview
Today last price 16.572
Today Daily Change 0.0304
Today Daily Change % 0.18
Today daily open 16.5416
 
Trends
Daily SMA20 16.7952
Daily SMA50 16.9924
Daily SMA100 17.0823
Daily SMA200 17.2054
 
Levels
Previous Daily High 16.6832
Previous Daily Low 16.5116
Previous Weekly High 16.9472
Previous Weekly Low 16.6683
Previous Monthly High 17.2852
Previous Monthly Low 16.9953
Daily Fibonacci 38.2% 16.5771
Daily Fibonacci 61.8% 16.6176
Daily Pivot Point S1 16.4744
Daily Pivot Point S2 16.4072
Daily Pivot Point S3 16.3028
Daily Pivot Point R1 16.646
Daily Pivot Point R2 16.7504
Daily Pivot Point R3 16.8176

 

 

08:33
EUR/USD pushes lower after disappointing German Retail Sale EURUSD
  • EUR/USD takes another step lower on poor German Retail Sales data. 
  • Subdued consumer spending levels in Germany increase the probability the ECB will cut interest rates soon. 
  • This contrasts with the US, where Fed officials are advocating a delay in rate cuts. 

EUR/USD edges down on Thursday, retesting key support at 1.0800, after the release of subpar German Retail Sales data raised further concerns over the health of Europe’s largest economy, weighing on the Euro (EUR). 

EUR/USD downtrend continues on fears Fed could delay cuts

EUR/USD’s move down extends the short-term downtrend that started after the rollover from the March 8 highs in the 1.0980s. The main catalyst appears to be the diverging commentary from rate-setters at the US Federal Reserve (Fed) and European Central Bank (ECB). 

Whilst at the beginning of March the ECB was signaling it would cut interest rates by June and the Fed potentially by as early as May, recent higher-than-expected US data and sticky inflation has led many Fed officials to question whether it may be too early to start cutting interest rates. 

The view the Fed may keep interest rates higher for longer has supported the US Dollar (USD) because higher interest rates tend to attract more foreign capital inflows. This is bearish for EUR/USD, which measures the buying power of a single Euro in USD terms. 

On Wednesday, Federal Reserve board member Christopher Waller added his voice to those advocating a delay, saying that “there is no rush to cut the policy rate,” in a speech to the Economic Club of New York, according to Reuters. 

ECB officials, on the other hand, have cleaved increasingly to June. Eurozone economic data has been on the whole disappointing compared to US data, although persistently high wage inflation still concerns some policymakers. 

EUR/USD took another step lower on Thursday after German Retail Sales in February showed shoppers on the whole tightening their purse strings. Weakening consumer spending is another sign inflation will come down further, prompting the ECB to cut interest rates. 

Retail Sales fell 2.7% YoY in Germany, which was far below estimates of a 0.8% decline, according to data from Statistisches Bundesamt Deutschland. Month-on-month the 1.9% decrease must have come as a shock after economists predicted a 0.3% rise.

Friday’s US core Personal Consumption Expenditures (PCE) Price Index data for February – the Fed’s preferred gauge of inflation – is likely to be an even more important release for EUR/USD. 

A higher-than-expected result could push even further back the time when the Fed is expected to cut interest rates, with negative consequences for the pair. 

Technical Analysis: EUR/USD continues pushing lower

EUR/USD extends the dominant short-term downtrend that started at the March 8 high. It is currently retesting key support at around 1.0800. 

Euro versus US Dollar: 4-hour chart

The pair formed a three wave price pattern called a Measured Move back in February and early March and the low of wave B is underpinning key support at just above 1.0800. 

If the downtrend continues and breaks decisively below the B-wave lows at roughly 1.0795 it would signal a continuation of the downtrend even lower, to the next target at 1.0750, followed by the February lows at roughly 1.0700. 

A decisive break is one characterized by a long red bearish candle that breaks cleanly through the level and closes near its low, or three down candles in a row that breach the level. 

Alternatively, a move above the 1.0950 level would bring into question the validity of the short-term downtrend. 

 

Euro FAQs

The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

 

08:23
EUR/GBP retreats from 0.8570 on weak German Retail Sales EURGBP
  • EUR/GBP faces sell-off near 0.8570 on poor German Retail Sales for February.
  • Monthly German Retail Sales surprisingly dropped by 1.9% against expectations of 0.3% growth.
  • BoE Haskel sees rate cuts are far away.

The EUR/GBP pair falls back from 0.8570 as German Retail Sales data for February remains weaker than expected. Monthly Retail Sales surprisingly contracted by 1.9% against the consensus of 0.3% growth. In January, Retail Sales dropped by 0.4%. Annually, sales at retail stores were declined at a higher pace of 2.7% against expectations of -0.8% and the former decline of 1.4%.

The Retail Sales data is an indicator of the current status of consumer spending, which accounts for a major part of the economy. Weak Retail Sales data indicates deepening cost of living crisis due to high interest rates by the European Central Bank (ECB).

Poor Retail Sales could force ECB policymakers to discuss more about reducing interest rates early. Weak German Retail Sales tend to influence ECB policymakers heavily as it is the largest economy of Eurozone in term of Gross Domestic Product (GDP). ECB policymaker Madis Muller said on Tuesday that “we're closer to a point where ECB can start cutting rates.” Easing wage growth has fuelled ECB’s rate-cut expectations for the June meeting.

Meanwhile, the Pound Sterling remains unchanged even though Bank of England (BoE) policymaker Jonathan Haskel delivers a hawkish guidance on interest rates. BoE Haskel said on late Wednesday to the Financial Times that rate cuts should be "a long way off." Haskel warned that, “fall in headline inflation is good news. However, he doesn’t think the headline figures give a good guide to the persistence.”

EUR/GBP

Overview
Today last price 0.8559
Today Daily Change -0.0007
Today Daily Change % -0.08
Today daily open 0.8566
 
Trends
Daily SMA20 0.8552
Daily SMA50 0.8549
Daily SMA100 0.8597
Daily SMA200 0.8608
 
Levels
Previous Daily High 0.8585
Previous Daily Low 0.8565
Previous Weekly High 0.8602
Previous Weekly Low 0.853
Previous Monthly High 0.8578
Previous Monthly Low 0.8498
Daily Fibonacci 38.2% 0.8573
Daily Fibonacci 61.8% 0.8578
Daily Pivot Point S1 0.8559
Daily Pivot Point S2 0.8552
Daily Pivot Point S3 0.8539
Daily Pivot Point R1 0.8579
Daily Pivot Point R2 0.8592
Daily Pivot Point R3 0.8599

 

 

08:19
Pound Sterling faces pressure on firm BoE rate cut bets
  • The Pound Sterling falls to 1.2600 against the US Dollar as investors wait for US core PCE inflation data for February.
  • The Fed’s preferred inflation gauge could give clues over when the Fed may begin the rate-cut cycle.
  • UK’s soft inflation data for February has lifted expectations for BoE rate cuts in June.

The Pound Sterling (GBP) drops to 1.2600 against the US Dollar in Thursday’s European session. More broadly, the GBP/USD pair struggles for direction as investors wait for fresh cues about when the Bank of England (BoE) will begin reducing interest rates. The United Kingdom’s inflation has come down significantly, but BoE policymakers are expected to adopt a cautious approach as early rate cuts could revamp price pressures again.

Investors expect that the BoE will start cutting rates from the June meeting. The expectations have been prompted by sharply easing inflation in February. Also, no BoE policymakers see the need for more rate hikes, indicating that the current level of interest rates is sufficiently restrictive. Generally, the Pound Sterling weakens when investors expect the BoE will start reducing borrowing rates early.

Meanwhile, the UK Office for National Statistics (ONS) released on Thursday its revised Q4 2023 Gross Domestic Product (GDP) estimates, confirming that the economy contracted by 0.3% in the October-December period.

The US Dollar rises ahead of the United States core Personal Consumption Expenditure (PCE) Price Index data for February, which will be published on Friday. The measure, which gauges underlying inflation, is expected to have increased steadily by 2.8% on year.

Daily digest market movers: Pound Sterling dips, but is broadly sideways

  • The Pound Sterling consolidates in a tight range slightly above 1.2600 as investors seek fresh guidance on the UK interest-rate outlook. Bank of England policymakers are mixed about rate cuts as Jonathan Haskel said on Wednesday to the Financial Times that rate cuts should be "a long way off."  Haskel further added: “Although the fall in headline inflation is very good news, it is not informative about what we really care about. What we really care about is the persistent and the underlying inflation.”
  • The comments from Jonathan Haskel suggest that he has low confidence on progress in inflation declining to 2% and rate cuts are still off the table. On the contrary, BoE Governor Andrew Bailey said in a recent interview with the Financial Times that market expectations for two or three rate cuts this year are not “unreasonable”. Regarding the inflation outlook, Bailey said "We are not seeing a lot of sticky persistence."
  • Currently, market expectations for BoE rate cuts have been brought forward to the June policy meeting from prior anticipation for August after UK inflation softened more than expected in February. Apart from that, the BoE’s slightly dovish outlook on interest rates in last week’s monetary policy statement has boosted expectations for June’s rate cuts.
  • Meanwhile, the market sentiment is slightly risk-off as S&P 500 futures trade lower in Thursday’s European session. The US Dollar Index (DXY) rises to 104.40, an inch away from its monthly high of 104.50, amid uncertainty ahead of the United States core PCE Price Index data for February.

Technical Analysis: Pound Sterling consolidates around 1.2600

The Pound Sterling trades back and forth in a narrow range around 1.2600. The GBP/USD pair seems vulnerable around 1.2600 as the 20-day Exponential Moving Average (EMA) at 1.2690 has turned down. The asset is slowly declining to the 200-day EMA, which trades around 1.2564. On the downside, the horizontal support from December 8 low at 1.2500 would provide cushion to the Pound Sterling bulls.

The 14-period Relative Strength Index (RSI) slips to near 40.00. A bearish momentum would trigger if the RSI dips below this level.

 

Pound Sterling FAQs

The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, aka ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).

The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.

Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.

Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

 

08:14
EUR/USD could crack the 1.0800 mark on the Easter weekend – Commerzbank EURUSD

EUR/USD struggles to gain traction in the second half of the week. Will the easter bunny bring quotes below 1.0800? Economists at Commerzbank analyze the pair’s outlook.

Maybe a little tailwind for the Dollar

The real data heavyweight is not on the agenda until Good Friday: the deflator for consumer spending or the PCE index, the Fed's preferred measure of inflation. However, as the consumer and producer price data for February have already been published, the PCE index is normally quite easy to forecast. 

Our experts expect +0.4% month-on-month and +0.3% for the core rate, which should mean annual rates of 2.5% and 2.8% respectively. The data for December and January are likely to be revised slightly upwards.

Although June is now back in focus as the timing for the first Fed rate cut, the still stubbornly high inflation data or statements such as that made by FOMC Governor Christopher Waller at the Economic Club of New York that there is no rush to cut the key interest rate, could still lead to the Dollar gaining a tailwind in thin markets and EUR/USD cracking the 1.0800 mark on the Easter weekend.

 

08:03
EUR/USD could head to 1.0780 and perhaps 1.0750 under 1.0800 support – ING EURUSD

EUR/USD holds slightly above the 1.0800 level. Economists at ING analyze the pair’s outlook.

Trading conditions will continue to be sticky

We suspect that if it were not for month-end portfolio re-balancing flows, EUR/USD would be trading below 1.0800 now. And that looks the risk heading into Friday's release of February core PCE inflation data for the US, which is expected at a sticky 0.3% month-on-month. 

Under 1.0800 support, we could see EUR/USD heading to 1.0780 and perhaps 1.0750. However, one month EUR/USD traded volatility below 5% suggests trading conditions will continue to be sticky.

 

08:02
Austria Producer Price Index (YoY) rose from previous -7.2% to -6.4% in February
08:02
Austria Producer Price Index (MoM) increased to -0.3% in February from previous -1%
07:58
USD/CHF advances to near 0.9060 due to risk aversion, Swiss Leading Indicator eyed USDCHF
  • USD/CHF gains ground on risk-off sentiment ahead of US data.
  • US GDP Annualized is expected to remain consistent at 3.2% in the fourth quarter of 2023.
  • KOF Leading Indicator is expected to show a slight uptick to 102.0 in March, compared to the previous reading of 101.6.

USD/CHF moves higher to near 0.9060 during the early European session on Thursday. The US Dollar (USD) receives upward support against the Swiss Franc (CHF), which could be attributed to the risk aversion ahead of the key economic figures from the United States (US).

Traders adopt a cautious stance ahead of the releases of Gross Domestic Product Annualized and Initial Jobless Claims data scheduled to be released on Thursday. Furthermore, Personal Consumption Expenditures is set to be revealed on Friday.

US Dollar Index (DXY) rises to near 104.50, with higher 2-year and 10-year yields on US coupon bonds standing at 4.61% and 4.20%, respectively, by the press time. However, conflicting views among members of the Federal Open Market Committee (FOMC) regarding monetary policy easing are adding to market uncertainty.

Federal Reserve Board Governor Christopher Waller continues to advocate for a cautious approach toward rate cuts, citing persistent inflation data. Atlanta Fed President Raphael Bostic shares this sentiment, foreseeing only one rate cut this year and warning against premature reductions that could worsen economic disruptions.

In other news, the ZEW Survey – Expectations rose by 1.3 points in March to reach 11.5, the highest level since October 2021. This increase was supported by the Swiss National Bank's decision to lower its interest rate by 25 basis points to 1.5%. Following the announcement, the Swiss Franc (CHF) weakened further year-to-date, as the SNB's move is likely to undermine the currency, being the first G10 central bank to implement such a cut.

Looking ahead, the Swiss Leading Indicator, to be released on Thursday by the KOF Swiss Economic Institute, is expected to show a slight uptick to 102.0 in March, compared to the previous reading of 101.6.

USD/CHF

Overview
Today last price 0.9062
Today Daily Change 0.0024
Today Daily Change % 0.27
Today daily open 0.9038
 
Trends
Daily SMA20 0.887
Daily SMA50 0.8787
Daily SMA100 0.8735
Daily SMA200 0.8818
 
Levels
Previous Daily High 0.9072
Previous Daily Low 0.9033
Previous Weekly High 0.902
Previous Weekly Low 0.8822
Previous Monthly High 0.8886
Previous Monthly Low 0.8553
Daily Fibonacci 38.2% 0.9048
Daily Fibonacci 61.8% 0.9057
Daily Pivot Point S1 0.9023
Daily Pivot Point S2 0.9008
Daily Pivot Point S3 0.8984
Daily Pivot Point R1 0.9062
Daily Pivot Point R2 0.9086
Daily Pivot Point R3 0.9101

 

 

07:53
Gold Price Forecast: Rising XAU/USD suggests market expects further inflation falls to support rate cuts – ANZ

Gold extended recent gains amid expectations of lower inflation. Economists at ANZ Bank analyze the yellow metal’s outlook.

Safe haven demand remains strong

The US Personal Consumption Expenditures (PCE) Price Index – the Fed’s preferred inflation gauge – will be released on Friday when markets are closed. 

A rising Gold price suggests the market expects further falls in inflation should support the central banks move to cut rates later this year.

Safe haven demand also remains strong.

See: Gold Price Forecast: Push back in rate cut expectations from March to June may cap XAU/USD rally – ANZ

07:28
USD/INR: A modestly stronger Rupee by the end of 2024 – ANZ

Economists at ANZ Bank expect the Indian Rupee (INR) to enjoy a mild appreciation over the course of the year.

INR to remain less volatile compared to other Asian currencies

A balance of payments surplus points to a stronger Rupee, but the RBI’s two-way FX intervention to keep the INR stable has capped volatility compared to USD/Asia. 

The RBI has been building up its foreign currency reserves, whenever possible, which are now at record highs. It believes them, not the exchange rate, to be its first line of defence against external shocks. We expect this trend to continue and the INR to gain modestly over 2024. However, once there is clarity around Fed rate cuts, the impetus for allowing the Rupee to appreciate could be stronger.

 

07:21
GBP/JPY loses ground near 191.00 following UK GDP data
  • GBP/JPY edges lower to 191.00 following the UK GDP Q4 data on Thursday. 
  • The UK GDP numbers contracted 0.3% QoQ and 0.2% YoY in Q4, as expected. 
  • The speculation that the Bank of Japan (BoJ) will intervene in the FX market might lift the Japanese Yen against the Euro. 
  • Investors will closely watch the Tokyo Consumer Price Index (CPI) for March, due on Friday. 

The GBP/JPY cross trades in negative territory for two straight days, hovering around the 191.00 mark on Thursday. The dovish remarks from the Bank of England (BoE) exert some selling pressure on the Pound Sterling (GBP). 

The latest data from the Office for National Statistics showed on Thursday that the UK Gross Domestic Product (GDP) for the fourth quarter (GDP) contracted 0.3% QoQ and 0.2% YoY in Q4. Both figures were in line with market expectations. The GBP remains weak following the UK GDP numbers as the markets raise their bet that the Bank of England (BoE) will begin three quarter-point reductions in rates this year. The BoE Governor Andrew Bailey said that interest rate cuts will be ‘in play’ at future BoE policy meetings.

On the other hand, the weakening of the Japanese Yen might be limited amid speculation that the Bank of Japan (BoJ) will intervene in the FX market to stop disorderly and speculative moves in the currency. Japan’s Chief Cabinet Secretary Yishimasa Hayashi stated on Thursday that he will closely watch the FX volatility and won’t rule out any steps against excessive moves. 

Moving on, market participants will keep an eye on the Tokyo Consumer Price Index (CPI) for March, Unemployment Rate, Industrial Production, and Retail Trade, due on Friday. If the Japanese CPI data shows softer-than-estimated, this could complicate the BoJ's interest rate hike path and weigh on the JPY. The UK market will be closed on the occasion of Good Friday. 

GBP/JPY

Overview
Today last price 191.02
Today Daily Change -0.13
Today Daily Change % -0.07
Today daily open 191.15
 
Trends
Daily SMA20 190.34
Daily SMA50 189.26
Daily SMA100 186.67
Daily SMA200 184.78
 
Levels
Previous Daily High 191.54
Previous Daily Low 190.51
Previous Weekly High 193.54
Previous Weekly Low 189.54
Previous Monthly High 191.33
Previous Monthly Low 185.23
Daily Fibonacci 38.2% 190.9
Daily Fibonacci 61.8% 191.15
Daily Pivot Point S1 190.6
Daily Pivot Point S2 190.04
Daily Pivot Point S3 189.57
Daily Pivot Point R1 191.62
Daily Pivot Point R2 192.1
Daily Pivot Point R3 192.65

 

 

07:02
German Retail Sales decline 2.7% YoY in February vs. -0.8% expected

Germany's Retail Sales dropped 1.9% MoM in February, slowing from a 0.4% decline in January, according to the official data released by Destatis on Thursday. The data missed the market expectations for a 0.3% increase.

Retail Sales in the Eurozone's biggest economy fell 2.7% YoY in February versus a 1.4% annual drop reported in January, much below the forecast of -0.8%.

EUR/USD reaction to the German data

Weaker-than-forecast German data are weighing on the Euro, pushing EUR/USD closer toward 1.0800. The pair is trading 0.10% down on the day at 1.0814, as of writing.

Euro price today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Pound Sterling.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   -0.03% -0.06% -0.03% -0.02% 0.03% 0.07% 0.01%
EUR 0.03%   -0.03% 0.01% 0.02% 0.07% 0.09% 0.04%
GBP 0.06% 0.03%   0.04% 0.05% 0.10% 0.13% 0.07%
CAD 0.02% -0.01% -0.04%   0.01% 0.05% 0.04% 0.03%
AUD 0.02% -0.02% -0.05% 0.01%   0.08% 0.08% 0.02%
JPY -0.04% -0.06% -0.10% -0.05% -0.04%   0.03% -0.05%
NZD -0.07% -0.10% -0.08% -0.10% -0.08% 0.00%   -0.05%
CHF -0.03% -0.06% -0.07% -0.06% -0.04% 0.03% 0.06%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

 

07:01
United Kingdom Total Business Investment (QoQ) declined to 1.4% in 4Q from previous 1.5%
07:01
United Kingdom Gross Domestic Product (YoY) meets expectations (-0.2%) in 4Q
07:01
United Kingdom Gross Domestic Product (QoQ) in line with expectations (-0.3%) in 4Q
07:00
Turkey Economic Confidence Index climbed from previous 99 to 100 in March
07:00
United Kingdom Current Account came in at £-21.177B, above forecasts (£-21.4B) in 4Q
07:00
United Kingdom Total Business Investment (YoY): 2.8% (4Q) vs previous 3.7%
07:00
Germany Retail Sales (YoY) below expectations (-0.8%) in February: Actual (-2.7%)
07:00
Germany Retail Sales (MoM) below forecasts (0.3%) in February: Actual (-1.9%)
06:37
Forex Today: Subdued action continues heading into Easter holiday

Here is what you need to know on Thursday, March 28:

Major currency pairs continue to fluctuate in familiar ranges in the second half of the week. Before markets go into the Easter holiday on Friday, the US economic docket will feature weekly Jobless Claims, February Pending Home Sales and the University of Michigan's Consumer Sentiment Index for March. Additionally, the US Bureau of Economic Analysis will release the final revision to the fourth quarter Gross Domestic Product growth before it publishes the Personal Consumption Expenditures (PCE) Price Index data for February on Friday.

The US Dollar (USD) Index closed the day virtually unchanged on Wednesday as the improving risk mood made it difficult for the currency to gather strength against its rivals. Early Thursday, the USD Index moves up and down in a narrow channel below 104.50. Meanwhile, the benchmark 10-year US Treasury bond yield extends its sideways grind above 4.2% and US stock index futures trade marginally lower. 

US Dollar price this week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Swiss Franc.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   -0.10% -0.22% -0.20% -0.05% 0.03% 0.06% 0.88%
EUR 0.12%   -0.13% -0.10% 0.08% 0.15% 0.21% 0.99%
GBP 0.22% 0.12%   0.04% 0.18% 0.26% 0.33% 1.12%
CAD 0.19% 0.09% -0.02%   0.16% 0.24% 0.30% 1.08%
AUD 0.07% -0.05% -0.17% -0.14%   0.04% 0.11% 0.93%
JPY -0.03% -0.12% -0.15% -0.22% -0.06%   0.07% 0.86%
NZD -0.10% -0.16% -0.27% -0.25% -0.11% -0.03%   0.84%
CHF -0.90% -1.00% -1.13% -1.10% -0.93% -0.90% -0.80%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

 

USD/JPY retreated after touching a multi-decade high near 152.00 on Wednesday. The pair, however, stabilized above 151.00. Japan’s Chief Cabinet Secretary Yishimasa Hayashi said on Thursday that he “won't rule out any options against excessive currency moves.” In the meantime, the Bank of Japan's (BoJ) Summary of Opinions from its March monetary policy showed earlier in the day that one of the policymakers argued that the yield curve control, the negative interest rate and other massive stimulus tools have accomplished their roles. In the Asian session on Friday, Industrial Production and Tokyo Consumer Price Index data from Japan will be watched closely by market participants.

Japanese Yen hangs near multi-decade low against USD, not out of the woods yet.

USD/CAD closed the third consecutive day in negative territory on Wednesday and went into a consolidation phase below 1.3600 early Friday. Statistics Canada will publish the monthly GDP growth for January later in the day.

Consumer Inflation Expectations in Australia declined to 4.3% in March from 4.5% in February, while Retail Sales grew by 0.3% on a monthly basis in February. After closing the day flat on Wednesday, AUD/USD came under modest bearish pressure and retreated toward 0.6500 early Thursday.

Australian Dollar moves sideways amid a stable US Dollar, US economic data awaited.

EUR/USD struggles to gain traction in the second half of the week but manages to hold comfortably above 1.0800. 

GBP/USD registered small gains on Wednesday but failed to extend its recovery early Thursday. The pair was last seen trading marginally lower on the day below 1.2650.

After facing rejection near $2,200 and making a deep downward correction in the first half of the day on Wednesday, Gold gathered bullish momentum and closed in the green above $2,190. XAU/USD stays relatively quiet early Friday but remains within a touching distance of $2,200.

Gold price flat lines below $2,200 mark as traders await US PCE Price Index on Friday.

 

Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

 

06:13
Silver Price Forecast: XAG/USD rises to $24.70 ahead of US core PCE Inflation
  • Silver price moves higher to $24.70, while the broader trend is sideways.
  • The core PCE inflation will provide cues about Fed’s rate cut timing.
  • Fed policymakers see three rate cuts by the year-end.

Silver price (XAG/USD) advances to $24.70 in the late Asian session on Thursday. The white metal posts gains ahead of the United States core Personal Consumption Expenditure Price Index (PCE) data for February, which will be published on Friday.

Core PCE will provide cues about when the Federal Reserve (Fed) will begin reducing interest rates. The annual underlying inflation data is estimated to have grown steadily by 2.8%, with monthly growth declining to 0.3% from 0.4% in January.

Currently, market expectations indicate that the Fed will cut interest rates from the June policy meeting. The expectations also show that there will be three rate cuts by the year-end, as projected by Fed policymakers in the monetary policy meeting last week.

According to the CME FedWatch tool, traders are pricing in 64% chance that the Fed will trim interest rates in June.

Meanwhile, the US Dollar Index (DXY) edges down slightly from monthly highs of 104.50. The USD Index is broadly sideways in a 104.00-104.50 range from last four trading sessions. The US core PCE inflation is expected to support the USD index to blown out the consolidation. 10-year US Treasury yields rebound to 4.21% after falling sharply to 4.18% on Wednesday.

Silver technical analysis

Silver price consolidates in a range of $24.32-$25.00 from a week. This exhibits an indecisiveness among market participants. The 20-period Exponential Moving Average (EMA) at $24.60 remain stick to the spot price, demonstrating a sideways trend.

The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 zone, indicating a sharp volatility contraction.

Silver hourly chart

XAG/USD

Overview
Today last price 24.64
Today Daily Change -0.05
Today Daily Change % -0.20
Today daily open 24.69
 
Trends
Daily SMA20 24.43
Daily SMA50 23.39
Daily SMA100 23.53
Daily SMA200 23.36
 
Levels
Previous Daily High 24.69
Previous Daily Low 24.33
Previous Weekly High 25.77
Previous Weekly Low 24.4
Previous Monthly High 23.5
Previous Monthly Low 21.93
Daily Fibonacci 38.2% 24.55
Daily Fibonacci 61.8% 24.47
Daily Pivot Point S1 24.45
Daily Pivot Point S2 24.21
Daily Pivot Point S3 24.09
Daily Pivot Point R1 24.81
Daily Pivot Point R2 24.93
Daily Pivot Point R3 25.17

 

 

06:10
GBP/USD Price Analysis: The next downside target is located at the 1.2600–1.2605 region GBPUSD
  • GBP/USD trades on a softer note below the mid-1.2600s on Thursday ahead of UK GDP growth numbers data. 
  • The pair keeps the bearish vibe below the key EMA; RSI indicator holds below the 50 midlines. 
  • The immediate resistance level will emerge at 1.2655; the initial support level is located at the 1.2600–1.2605 zone.

The GBP/USD pair remains on the defensive around 1.2630 on Thursday during the early European trading hours. The hawkish tone from Federal Reserve (Fed) Governor Christopher Waller early Thursday has lifted the US Dollar (USD) broadly, which creates a headwind for the GBP/USD pair. 

The Fed’s Waller said the US central bank is in no rush to cut the benchmark rate and may need to “maintain the current rate target for longer than expected. Traders await the final UK Gross Domestic Product (GDP) growth number for Q4 on Thursday, which is projected to contract 0.3% QoQ in Q4. 

From a technical perspective, GBP/USD maintains the bearish outlook unchanged as the major pair holds below the key 100-period Exponential Moving Average (EMA) on the four-hour chart. The downward momentum is confirmed by the Relative Strength Index (RSI), which lies below the 50 midlines, supporting the sellers for the time being.

The first upside barrier for GBP/USD will emerge near the upper boundary of the Bollinger Band at 1.2655. A break above the latter will expose the 100-period EMA at 1.2685. Further north, the next hurdle is seen near a high of March 18 at 1.2746, followed by the psychological level of 1.2800. 

On the flip side, the initial support level of the major pair is located near the lower limit of the Bollinger Band at the 1.2600-1.2605 region. A breach of this level will pave the way to a low of March 22 at 1.2575. The next contention level to watch is a low of February 14 at 1.2535, en route to the 1.2500 round figure. 

GBP/USD four-hour chart

GBP/USD

Overview
Today last price 1.2632
Today Daily Change -0.0009
Today Daily Change % -0.07
Today daily open 1.2641
 
Trends
Daily SMA20 1.2719
Daily SMA50 1.2679
Daily SMA100 1.2649
Daily SMA200 1.2591
 
Levels
Previous Daily High 1.2641
Previous Daily Low 1.2606
Previous Weekly High 1.2804
Previous Weekly Low 1.2575
Previous Monthly High 1.2773
Previous Monthly Low 1.2518
Daily Fibonacci 38.2% 1.2628
Daily Fibonacci 61.8% 1.2619
Daily Pivot Point S1 1.2617
Daily Pivot Point S2 1.2593
Daily Pivot Point S3 1.2581
Daily Pivot Point R1 1.2653
Daily Pivot Point R2 1.2665
Daily Pivot Point R3 1.2688

 

 

 

06:07
FX option expiries for Mar 28 NY cut

FX option expiries for Mar 28 NY cut at 10:00 Eastern Time, via DTCC, can be found below

- EUR/USD: EUR amounts

  • 1.0752 803m
  • 1.0825 1.9b
  • 1.0850 1.7b
  • 1.0925 544m

- GBP/USD: GBP amounts     

  • 1.2600 1.1b

- USD/JPY: USD amounts                     

  • 150.00 1.3b
  • 150.50 2.9b
  • 151.00 732m
  • 152.00 2.3b

- USD/CAD: USD amounts       

  • 1.3600 1.6b
06:01
South Africa Private Sector Credit above expectations (3.12%) in February: Actual (3.32%)
05:36
BoE’s Haskel warns against rushing to cut interest rates

In an interview with the Financial Times (FT) on Thursday, Bank of England (BoE) policymaker Jonathan Haskel warned against rushing to cut interest rates.

Haskel said that “I think cuts are a long way off.”

Additional quotes

Fall in headline inflation is very good news.

But what we really care about is persistence and underlying inflation.

Does not think headline inflation gives a good guide on persistence.

Vote change is because there were improvements in critical indicators of inflation.

Market reaction

GBP/USD fails to find any inspiration from the hawkish BoE commentary, currently trading at 1.2635, almost unchanged on the day.

 

BoE FAQs

The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).

When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.

In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.

Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.

 

05:13
NZD/USD depreciates to near 0.5990 following softer Kiwi Consumer Confidence NZDUSD
  • NZD/USD loses ground on softer Kiwi data released on Thursday.
  • ANZ – Roy Morgan Consumer Confidence fell to 86.4 in February from 94.5 prior.
  • US GDP Annualized is expected to remain consistent at a 3.2% increase in Q4.

NZD/USD snaps its three-day winning streak, depreciating to near 0.5990 during the Asian hours on Thursday. The New Zealand Dollar (NZD) faces challenges due to the softer-than-expected domestic key economic figures, which in turn, undermine the NZD/USD pair.

ANZ – Roy Morgan Consumer Confidence decreased to 86.4 in February from 94.5 in the prior month. The index stepped down from January 2022 level highs. Business Confidence fell to 22.9 in March, from the previous reading of 34.7. Kiwi markets will observe Good Friday and Easter Monday.

At the Boao Forum for Asia (BFA), China's top legislator, Zhao Leji, underscored China's commitment to inclusive economic globalization. He articulated China's opposition to unilateralism and protectionism in all manifestations and expressed a dedication to closely aligning its development with that of other nations.

The US Dollar (USD) shows subdued momentum as investors await the release of Gross Domestic Product Annualized data for the fourth quarter of 2023 from the United States (US) on Thursday. Furthermore, Personal Consumption Expenditures for February on Friday. The US Dollar Index (DXY) hovers around 104.30. US Treasury yields rebounded after losses in the previous two sessions, supporting the US Dollar.

Market participants are eagerly awaiting guidance from the Federal Reserve (Fed) on its interest rate trajectory. However, conflicting views among members of the Federal Open Market Committee (FOMC) regarding monetary policy easing are adding to market uncertainty.

NZD/USD

Overview
Today last price 0.5992
Today Daily Change -0.0012
Today Daily Change % -0.20
Today daily open 0.6004
 
Trends
Daily SMA20 0.6091
Daily SMA50 0.6109
Daily SMA100 0.6136
Daily SMA200 0.6074
 
Levels
Previous Daily High 0.6011
Previous Daily Low 0.5987
Previous Weekly High 0.6107
Previous Weekly Low 0.5989
Previous Monthly High 0.6219
Previous Monthly Low 0.6037
Daily Fibonacci 38.2% 0.6002
Daily Fibonacci 61.8% 0.5996
Daily Pivot Point S1 0.5991
Daily Pivot Point S2 0.5977
Daily Pivot Point S3 0.5967
Daily Pivot Point R1 0.6015
Daily Pivot Point R2 0.6025
Daily Pivot Point R3 0.6039

 

 

05:06
EUR/JPY holds below 164.00 amid BoJ intervention fears EURJPY
  • EUR/JPY trades on a softer note around 163.75 in Thursday’s early European session. 
  • The verbal intervention from Japanese authorities provides some support to the JPY. 
  • ECB’s Stoumaras said there is a growing consensus for a rate cut in June. 
  • The German February Retail Sales data will be due later on Thursday. 

The EUR/JPY cross trades with a mild negative bias around 163.75 during the early European session on Thursday. The cross edges lower amid the fear of foreign exchange intervention from the Japanese authorities.  

On Thursday, Japan’s Chief Cabinet Secretary Yishimasa Hayashi said that he will not rule out any options against excessive foreign exchange moves and will closely watch it. This verbal intervention complied with top currency diplomat Masato Kanda statement that he will react to the disorderly FX moves. The fear of FX intervention from Japanese authorities might support the Japanese Yen (JPY) and limit the upside of the EUR/JPY cross in the near term. 

On the Euro front, the growing speculation that the European Central Bank (ECB) will cut the interest rate in June acts as a headwind for the Euro (EUR) against the JPY. On Tuesday, ECB official Yannis Stoumaras said that there is a higher chance for a June rate cut, while Bank of Italy Governor Fabio Panetta said on Monday that the ECB is moving towards an interest rate cut as inflation is easing rapidly and approaching the 2% target. 

Looking ahead, traders will monitor German Retail Sales data, which is estimated to drop 0.8% YoY in February. Also, the German Unemployment Change and Italian Producer Price Index (PPI) will be released. On Friday, market players will turn their focus to the Tokyo Consumer Price Index (CPI) for March. In the case of the stronger-than-expected data, this could lift the JPY against the EUR. 

§

EUR/JPY

Overview
Today last price 163.77
Today Daily Change 0.01
Today Daily Change % 0.01
Today daily open 163.76
 
Trends
Daily SMA20 162.78
Daily SMA50 161.79
Daily SMA100 160.48
Daily SMA200 159.05
 
Levels
Previous Daily High 164.42
Previous Daily Low 163.44
Previous Weekly High 165.36
Previous Weekly Low 161.95
Previous Monthly High 163.72
Previous Monthly Low 158.08
Daily Fibonacci 38.2% 163.81
Daily Fibonacci 61.8% 164.05
Daily Pivot Point S1 163.32
Daily Pivot Point S2 162.89
Daily Pivot Point S3 162.34
Daily Pivot Point R1 164.3
Daily Pivot Point R2 164.85
Daily Pivot Point R3 165.28

 





 

 

04:12
USD/CAD struggles to capitalize on its modest intraday gains, remains below 1.3600 mark USDCAD
  • USD/CAD gains some positive traction on Thursday, though the upside remains capped.
  • The Fed’s projected three rate cuts in 2024 caps the upside for the USD and the major.
  • An uptick in Oil prices underpins the Loonie and contributes to keeping a lid on the pair.

The USD/CAD pair attracts some buyers during the Asian session on Thursday and for now, seems to have snapped a three-day losing streak, albeit lacks follow-through. Spot prices remain below the 1.3600 mark as traders look to important macro data from the US and Canada for some meaningful impetus.

Thursday's economic docket highlights the release of the monthly Canadian GDP report, along with the final US Q4 GDP print. Apart from this, the usual Initial Weekly Jobless Claims, Pending Home Sales and the revised Michigan Consumer Sentiment Index might influence the US Dollar (USD), which might produce short-term trading opportunities around the USD/CAD pair. The focus, however, remains glued to the US Personal Consumption Expenditures (PCE) Price Index on Friday.

In the meantime, the overnight hawkish remarks by Federal Reserve (Fed) Governor Christopher Waller cooled rate cut hopes and pushed the USD back closer to the monthly peak, lending some support to the USD/CAD pair. The Fed, however, projected a less restrictive policy going forward and indicated that it remains on track to cut interest rates by 75 basis points in 2024. This is holding back the USD bulls from placing aggressive bets and acting as a headwind for the currency pair.

Meanwhile, Crude Oil prices gain some follow-through traction in the wake of worries about tighter global supply amid lower Russian production. Furthermore, the Israel-Hamas conflict has shown little signs of de-escalation, which continues to fuel concerns about supply disruptions from the Middle East and lends additional support to the black liquid. This, in turn, is seen underpinning the commodity-linked Loonie and contributing to capping the upside for the USD/CAD pair.

USD/CAD

Overview
Today last price 1.3578
Today Daily Change 0.0010
Today Daily Change % 0.07
Today daily open 1.3568
 
Trends
Daily SMA20 1.3538
Daily SMA50 1.3504
Daily SMA100 1.35
Daily SMA200 1.3493
 
Levels
Previous Daily High 1.3608
Previous Daily Low 1.3565
Previous Weekly High 1.3614
Previous Weekly Low 1.3456
Previous Monthly High 1.3606
Previous Monthly Low 1.3366
Daily Fibonacci 38.2% 1.3582
Daily Fibonacci 61.8% 1.3592
Daily Pivot Point S1 1.3553
Daily Pivot Point S2 1.3537
Daily Pivot Point S3 1.3509
Daily Pivot Point R1 1.3596
Daily Pivot Point R2 1.3624
Daily Pivot Point R3 1.3639

 

 

04:04
EUR/USD inches lower to near 1.0820, focus on German Retail Sales, US GDP Annualized EURUSD
  • EUR/USD extends its losing streak on dovish remarks from ECB officials.
  • US GDP Annualized is expected to be consistent at a 3.2% increase in Q4.
  • German Retail Sales (MoM) is anticipated to show a 0.3% rise, against the previous decline of 0.4%.

EUR/USD continues to lose ground for the third successive session on Thursday, inching lower to near 1.0820 during the Asian session. However, the US Dollar (USD) exhibits tepid momentum ahead of the Gross Domestic Product Annualized data from the United States (US) for the fourth quarter of 2023. Furthermore, traders will likely observe the Personal Consumption Expenditures for February.

The US Dollar Index (DXY) hovers around 104.30, correcting from March’s highs. US Treasury yields retrace losses registered in the previous two sessions, which could provide support for the US Dollar.

Market participants await fresh guidance from the Federal Reserve (Fed) regarding its interest rate trajectory. However, conflicting opinions among members of the Federal Open Market Committee (FOMC) regarding monetary policy easing are contributing to market confusion.

Federal Reserve Board Governor Christopher Waller maintains his stance of 'no rush' to cut rates, citing persistent inflation data. Atlanta Fed President Raphael Bostic echoes a similar sentiment, anticipating only one rate cut this year, warning against premature rate reductions that could exacerbate economic disruptions.

The Euro faces downward pressure as European Central Bank (ECB) officials are increasingly suggesting a probable interest rate cut in June. Yannis Stoumaras remarked on Tuesday that there is a mounting consensus within the ECB for a rate reduction in June, a sentiment echoed by Madis Muller, who hinted at the ECB nearing a point where rate cuts are feasible.

Thursday will bring German Retail Sales data for February. The data is expected to show a decrease of 0.8% year-over-year. While the monthly report could reveal an increase of 0.3%, swinging from a previous decline of 0.4%.

EUR/USD

Overview
Today last price 1.0823
Today Daily Change -0.0005
Today Daily Change % -0.05
Today daily open 1.0828
 
Trends
Daily SMA20 1.0877
Daily SMA50 1.0839
Daily SMA100 1.0874
Daily SMA200 1.0837
 
Levels
Previous Daily High 1.0839
Previous Daily Low 1.0811
Previous Weekly High 1.0942
Previous Weekly Low 1.0802
Previous Monthly High 1.0898
Previous Monthly Low 1.0695
Daily Fibonacci 38.2% 1.0822
Daily Fibonacci 61.8% 1.0828
Daily Pivot Point S1 1.0813
Daily Pivot Point S2 1.0798
Daily Pivot Point S3 1.0785
Daily Pivot Point R1 1.0841
Daily Pivot Point R2 1.0854
Daily Pivot Point R3 1.0869

 

 

03:33
Gold price oscillates just below range upper limit at $2,200, bullish potential seems intact
  • Gold price fails to capitalize on its weekly gains registered over the past three days.
  • The overnight hawkish remarks by Fed’s Waller act as a headwind for the XAU/USD.
  • The downside seems limited as traders await more cues about the Fed’s rate-cut path.

Gold price (XAU/USD) continues with its struggle to make it through the $2,200 mark and oscillates in a range during the Asian session on Thursday. The overnight hawkish remarks from Federal Reserve (Fed) Governor Christopher Waller cooled rate cut hopes and pushed the US Dollar (USD) back closer to the monthly top. This, in turn, is seen as a key factor acting as a headwind for the non-yielding yellow metal, though any meaningful slide seems elusive as traders await more cues about the Fed's policy path before placing fresh directional bets.

Last week, the Fed projected a less restrictive monetary policy going forward and indicated that it remains on track to cut interest rates by 75 basis points in 2024. That said, the incoming US macro data suggested that the economy is in good shape and pointed to still-sticky inflation, which should allow the Fed to keep rates higher for longer. Hence, Friday's release of the US Personal Consumption Expenditures (PCE) Price Index will influence expectations about the Fed's rate-cut path, which will drive the USD and provide fresh impetus to the Gold price.

Daily Digest Market Movers: Gold price struggles to lure buyers amid mixed fundamental cues

  • Federal Reserve (Fed) Governor Christopher Waller said on Wednesday that he was in no hurry to cut rates in the wake of hotter inflation readings in recent months, boosting the US Dollar and capping gains for the Gold price.
  • Waller, however, noted that further expected progress on lowering inflation will make it appropriate for the Fed to start cutting interest rates later this year, which is seen acting as a tailwind for the non-yielding yellow metal.
  • Moreover, the Fed last week projected three interest rate cuts of 25 basis points each by the end of this year, and the markets are currently pricing in a greater chance of the first move at the June FOMC monetary policy meeting.
  • Apart from this, geopolitical risks stemming from the protracted Russia-Ukraine war and the ongoing conflicts in the Middle East should help limit any meaningful corrective decline for the safe-haven precious metal.
  • Traders now look to Thursday's US economic docket – featuring the release of the final Q4 GDP print, the usual Weekly Initial Jobless Claims, Pending Home Sales and the revised Michigan Consumer Sentiment Index.

Technical Analysis: Gold price needs to find acceptance above $2,200 for bulls to regain control

From a technical perspective, the range-bound price action witnessed over the past two weeks or so might be categorized as a bullish consolidation phase against the backdrop of a blowout rally since the beginning of this month. Moreover, oscillators on the daily chart are holding comfortably in the positive territory and support prospects for an eventual breakout to the upside. Some follow-through buying back above the $2,200 mark will reaffirm the constructive setup and allow the Gold price to retest the record high, around the $2,223 region touched last week.

On the flip side, any corrective decline now seems to find some support near the overnight swing low, around the $2,173 area ahead of the $2,164-2,163 zone. This is followed by the lower end of the short-term trading range, around the $2,146-2,145 region, which, if broken, might prompt aggressive technical selling. The Gold price might then accelerate the fall to the next relevant support near the $2,128-2,127 region en route to the $2,100 round-figure mark. The latter should act as a strong base, which, if broken, will suggest that the XAU/USD has topped out in the near term.

 

Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

 

02:56
Australian Dollar extends gains after paring losses amid softer Aussie Retail Sales
  • Australian Dollar recovers its intraday losses on risk-on sentiment.
  • Australia’s Retail Sales (MoM) increased by 0.3%, against the expected 0.4% and 1.1% prior.
  • US Dollar corrects ahead of US GDP Annualized data due on Thursday.

The Australian Dollar (AUD) manages to recover its intraday losses and extends its gains on Thursday. Challenges persisted for the AUD/USD pair due to softer Consumer Inflation Expectations and Retail Sales figures from Australia. These factors heightened expectations of the Reserve Bank of Australia (RBA) considering interest rate cuts in the second half of 2024. Additionally, Wednesday's release of the softer Australian Monthly Consumer Price Index supported this perspective.

Australia's consumer expectations for future inflation rose by 4.3% in March, a slight decrease from the previous increase of 4.5%. February's seasonally adjusted Retail Sales showed a month-over-month increase of 0.3%, falling short of the expected 0.4% and the prior 1.1%. Additionally, on Wednesday, Australia's Monthly Consumer Price Index (YoY) for February saw a 3.4% rise, maintaining consistency with previous levels but slightly below the anticipated 3.5%.

The US Dollar Index (DXY) appears to pause its two-day winning streak, edging lower in anticipation of the upcoming release of US Personal Consumption Expenditures (PCE) data scheduled for Friday. Nevertheless, the recent uptick in US Treasury yields may have lent support to the US Dollar (USD) amid divergent opinions among members of the Federal Open Market Committee (FOMC) regarding monetary policy easing.

Daily Digest Market Movers: Australian Dollar gains ground on improved risk appetite

  • Australia’s Westpac Consumer Confidence dipped 1.8% to 84.4 in March 2024 from February's 86.0, easing from 20-month highs.
  • Australia’s Westpac Leading Index (MoM) increased by 0.1% in February, against the previous decline of 0.09%.
  • Australia's government has pledged to support a minimum wage increase aligned with inflation this year, recognizing the ongoing challenges low-income families face amid rising living costs.
  • At the Boao Forum for Asia (BFA), China's top legislator, Zhao Leji, emphasized China's stance on inclusive economic globalization. He stated that China opposes unilateralism and protectionism in all their forms and is committed to closely linking its development with other countries.
  • Federal Reserve Board Governor Christopher Waller still sees 'no rush' to cut rates amid sticky inflation data.
  • Atlanta Fed President Raphael Bostic expressed his expectation for just one rate cut this year, cautioning that reducing rates prematurely could lead to greater disruption.
  • Fed Governor Lisa Cook cautioned against easing policy too soon, warning that it could exacerbate the risk of inflation becoming entrenched.
  • Chicago Fed President Austan Goolsbee, leaning towards a dovish stance, expects three cuts but indicates a need for more evidence of inflation subsiding before taking action.
  • US Durable Goods Orders increased by 1.4% in February, against the 1.3% expected and previous decline of 6.9%.
  • US Durable Goods Orders ex Defense rose by 2.2% in February, compared to the expected 1.1% and 7.9% previous decline.
  • US Housing Price Index (MoM) decreased by 0.1% in January, against the December’s increase of 0.1%.

Technical Analysis: Australian Dollar could test the major barrier of 0.6550

The Australian Dollar trades near 0.6540 on Thursday. Immediate resistance is observed around the 23.6% Fibonacci retracement level at 0.6541, coinciding with the major barrier of 0.6550 and the 21-day Exponential Moving Average (EMA) at 0.6553. On the downside, a notable support level is at the psychological mark of 0.6500, followed by March’s low at 0.6477. A breach below this level may lead the AUD/USD pair to test the major support level at 0.6450.

AUD/USD: Daily Chart

Australian Dollar price today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Japanese Yen.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   -0.09% -0.12% -0.10% -0.24% 0.03% -0.10% -0.12%
EUR 0.08%   -0.03% 0.01% -0.15% 0.15% -0.01% -0.03%
GBP 0.11% 0.03%   0.03% -0.12% 0.14% 0.02% 0.00%
CAD 0.08% 0.00% -0.03%   -0.15% 0.12% -0.01% -0.03%
AUD 0.24% 0.15% 0.12% 0.15%   0.30% 0.14% 0.12%
JPY -0.03% -0.11% -0.14% -0.11% -0.25%   -0.13% -0.17%
NZD 0.08% 0.01% -0.02% 0.01% -0.14% 0.13%   -0.02%
CHF 0.11% 0.03% 0.00% 0.03% -0.12% 0.18% 0.02%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

 

Australian Dollar FAQs

One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate, and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe havens (risk-off) – is also a factor, with risk-on positive for AUD.

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods, and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

 

02:52
USD/INR rebounds as Fed’s hawkish comments spur US Dollar demand
  • Indian Rupee loses ground on Thursday on the firmer USD and the Fed governor’s hawkish comments. 
  • The INR’s downside might be limited by the potential intervention from the Indian central bank. 
  • The RBI is expected to hold rates steady in its April meeting amid strong economic growth and elevated inflation.
  • The Annualized US GDP (Q4) growth number will be released on Thursday. 

Indian Rupee (INR) edges lower on Thursday amid the higher demand for the US Dollar (USD) from oil importers and the hawkish remarks from the Federal Reserve (Fed) officials. Furthermore, the ongoing weakening of Asian peers will continue to exert pressure on the INR. However, the downside of INR might be capped on the back of the Reserve Bank of India's (RBI) intervention in the foreign exchange market to help limit the depreciation in INR.

The Indian Central Bank released its monetary policy committee (MPC) schedule for the upcoming financial year 2024–25, starting from April 1, 2024. The first policy meeting will be held from April 3–5, and the RBI is anticipated to keep interest rates unchanged until at least July amid strong economic growth and elevated inflation. Moving on, investors await the release of the US Gross Domestic Product Annualized (Q4) on Thursday, which is estimated to grow at a steady pace at 3.2%. The US February Personal Consumption Expenditures Price Index (PCE) data will take center stage on Friday even though the markets are closed for Good Friday.

Daily Digest Market Movers: Indian Rupee remains vulnerable despite the robust economic outlook

  • India’s Current Account Deficit narrowed to $10.5 billion or 1.2% of Gross Domestic Product (GDP) in the fourth quarter (Q4) that ended December 2023 from $11.4 billion in the previous reading. 
  • Morgan Stanley has raised India’s GDP growth projection for FY 24-25 to 6.8% from 6.5% estimated earlier, citing the ongoing growth in industrial and capex activities.
  • S&P Global raised India's GDP growth forecast for FY25 to 6.8%, lower than the RBI’s estimation of 7%. Furthermore, S&P expects RBI to cut rates by 75 bps by the end of this fiscal year.
  • The Fed Governor Christopher Waller said early Thursday that the central bank is in no rush to cut the benchmark rate and may need to “maintain the current rate target for longer than expected.” 
  • Fed’s Waller further stated that he needs to see more inflation progress before supporting rate cuts.

Technical Analysis: Indian Rupee weakens, further upside is likely to remain limited

Indian Rupee trades on a softer note on the day. USD/INR extends its uptrend in the longer term since the pair rose above a multi-month-old descending trend channel last week. 

In the near term, USD/INR remains above the key 100-day Exponential Moving Average (EMA) on the daily chart, with the 14-day Relative Strength Index holding above the 50 midline. This upward momentum of the pair indicates the support levels are more likely to hold than to break, and there’s more room for further upside. 

The potential upside barrier for USD/INR will emerge at an all-time high of 83.49. A decisive break above this level will see a rally to 84.00 (round figure). On the downside, the initial support level is seen at 83.20 (high March 21), followed by 83.00 (psychological level, the 100-day EMA). A breach of the mentioned level could confirm that sellers are returning and ready to let the downtrend resume.

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   -0.08% -0.11% -0.09% -0.20% 0.05% -0.08% -0.11%
EUR 0.07%   -0.03% 0.01% -0.12% 0.16% 0.00% -0.02%
GBP 0.10% 0.03%   0.03% -0.09% 0.15% 0.02% 0.01%
CAD 0.08% 0.00% -0.01%   -0.12% 0.12% 0.00% -0.02%
AUD 0.20% 0.12% 0.10% 0.12%   0.28% 0.12% 0.10%
JPY -0.05% -0.11% -0.15% -0.12% -0.23%   -0.13% -0.17%
NZD 0.07% 0.00% -0.03% 0.00% -0.12% 0.13%   -0.03%
CHF 0.09% 0.02% -0.01% 0.02% -0.10% 0.17% 0.02%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

 

Indian Rupee FAQs

The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.

The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.

Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.

Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.

 

02:30
Commodities. Daily history for Wednesday, March 27, 2024
Raw materials Closed Change, %
Silver 24.633 0.81
Gold 2194.776 0.74
Palladium 990.74 -0.35
02:23
Japan’s Hayashi: Won't rule out any options against excessive currency moves

Japan’s Chief Cabinet Secretary Yishimasa Hayashi said on Thursday, he “won't rule out any options against excessive currency moves.”

On Wednesday, Hayashi said that he is “closely watching FX moves.”

Related reads

01:56
Japanese Yen edges lower against USD, languishes near Wednesday’s 34-year low
  • The Japanese Yen meets with a fresh supply in the wake of the BoJ’s dovish outlook.
  • Fed Governor Waller’s hawkish comments underpin the USD, supporting USD/JPY.
  • Thursday’s US macro data eyed for some impetus ahead of the PCE data on Friday.

The Japanese Yen (JPY) struggles to capitalize on the previous day's modest recovery against its American counterpart from the lowest level since 1990 and edges lower during the Asian session on Thursday. Speculations that Japanese authorities may soon intervene in the markets to support the domestic currency prompted traders to lighten their bearish bets around the JPY on Wednesday. That said, the Bank of Japan's (BoJ) cautious approach and uncertain outlook for future rate hikes caps any further JPY appreciating move. 

The US Dollar (USD), on the other hand, stands tall near the monthly peak in the wake of Federal Reserve Governor Christopher Waller's hawkish remarks on Wednesday. This turns out to be another factor that assists the USD/JPY pair to attract some dip-buying, though the upside seems limited as traders might wait for more cues about the Fed's policy path. Hence, the focus will remain glued to the US Personal Consumption Expenditures (PCE) Price Index – the Fed's preferred inflation gauge – due for release on Friday. 

Daily Digest Market Movers: Japanese Yen continues to be undermined by BoJ’s cautious outlook

  • Japan's top currency diplomat Masato Kanda said on Wednesday that he won't rule out any steps to respond to disorderly FX moves and provided a modest lift to the Japanese Yen. 
  • Japan's top monetary officials met to discuss the rapidly weakening currency and suggested that they were ready to intervene to stop disorderly and speculative moves in the currency.
  • The JPY recovery lacks follow-through in the wake of the Bank of Japan's dovish tone, indicating that accommodative financial conditions will be maintained for an extended period.
  • The view was echoed by BoJ Board Member Tamura Naoki, adding that the bank will guide monetary policy appropriately in accordance with the economic, price, and financial developments.
  • The overnight hawkish comments by Federal Reserve Governor Christopher Waller cooled rate cut hopes, lifting the US Dollar closer to the monthly top and lending support to the USD/JPY pair. 
  • Waller said that hotter-than-expected inflation readings in recent months and the current resilience in the US economy give the Fed substantial headroom to keep rates higher for longer.
  • Traders, however, seem reluctant to place aggressive directional bets and prefer to wait for the release of the US Personal Consumption Expenditures (PCE) Price Index on Friday.
  • The crucial inflation data will play a key role in influencing expectations about the Fed's rate cut path, which, in turn, will drive the USD and provide a fresh impetus to the currency pair.
  • In the meantime, Thursday's US economic docket – featuring the final Q4 GDP print, Weekly Initial Jobless Claims and Pending Home Sales – might produce short-term opportunities.

Technical Analysis: USD/JPY bulls need to wait for move beyond 152.00 before placing fresh bets

From a technical perspective, any subsequent move up might continue to confront stiff resistance and remain capped near the 152.00 mark. The said handle should act as a key pivotal point, which if cleared decisively will be seen as a fresh trigger for bullish traders. Given that oscillators on the daily chart are holding in the positive territory, the USD/JPY pair might then prolong its well-established uptrend witnessed since January 2023 and climb further towards the 153.00 round figure.

On the flip side, the overnight swing low, around the 151.00 mark, now seems to protect the immediate downside. Any further decline is more likely to attract fresh buyers and remain limited near the 150.25 support zone. This is closely followed by the 150.00 psychological mark, which, if broken decisively, could make the USD/JPY pair vulnerable to accelerate the corrective decline further towards the 149.35-149.30 region en route to the 149.00 round figure.

 

Japanese Yen FAQs

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation.

The BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supports a widening of the differential between the 10-year US and Japanese bonds, which favors the US Dollar against the Japanese Yen.

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

 

01:45
ASX 200 surges to record highs near 7,900 following softer economic data from Australia
  • ASX 200 Index extends its gains on expectations of RBA deducting interest rates in the second half of 2024.
  • Australia’s Consumer Inflation Expectations increased by 4.3% in March, against the previous rise of 4.5%.
  • Allup Silica has extended its application potential by achieving high-purity results from its Sparkler project.

The ASX 200 Index rises to nearly 7,900, up by 0.26% on Thursday, extending gains to new record highs. Positive market sentiment is bolstered by subdued Consumer Inflation Expectations and Retail Sales figures from Australia, which raise expectations of the Reserve Bank of Australia (RBA) adopting a more accommodative approach to interest rates. Furthermore, Wednesday's release of the Australian Monthly Consumer Price Index, which was lower than anticipated, lent further support to the Australian stock market.

Australia’s consumer expectations of future inflation during the next 12 months increased by 4.3% in March, lower than the previous increase of 4.5%. The seasonally adjusted Retail Sales increased by 0.3% month-over-month in February, against the expected 0.4% and 1.1% prior.

The ASX 200 Index surged, driven by strong performances in mining stocks, buoyed by rising prices of gold, iron ore, and lithium. Among the top gainers were Arcadium Lithium, which soared by 10.20% to 4.43; Alumina, which saw a rise of 5.60% to 1.42; and Whitehaven Coal, which increased by 5.27% to 7.10. On the other side, Xero experienced a decline of 1.09% to 132.43; Audinate Group fell by 0.75% to 21.24; and Tabcorp Holdings dipped by 1.05% to 0.76.

Allup Silica has expanded its potential applications with promising results from its Sparkler project in southern Western Australia, where bulk sample tests of high-purity silica have surpassed industry standards. This positions the product well for various high-purity applications, including photovoltaics and high-tech manufacturing.

Terra Uranium is enhancing its Canadian exploration and development endeavors by finalizing a binding letter of intent for the acquisition of the Amer Lake uranium deposit in Nunavut. This move follows Terra's recent acquisition of two new 100%-owned projects in Canada's Athabasca Basin.

AIC Mines, a copper producer, has reported a significant 86% increase in ore reserves at its Jericho copper deposit, located south of its Eloise high-grade underground copper mine in Queensland. The revised reserve estimate now stands at 3.2 million tonnes grading 1.9% copper and 0.4 grams per tonne of Gold, amounting to 61,100 tonnes of copper and 37,000 ounces of Gold.

 

Australian Stock Market FAQs

Stock markets in Australia are managed by the Australian Securities Exchange (ASX), headquartered in Sydney. The main indices are the S&P/ASX 200 and the S&P/ASX 300, which track the performance of the 200 and 300 largest stocks by market capitalization listed on the exchange, respectively. The S&P/ASX 200 was launched in April 2000, and it is rebalanced every quarter.

Almost half of the index belongs to the financial sector, with major banks like the Commonwealth Bank of Australia, Westpac or National Australia Bank. The so-called materials sector is also relevant – comprising almost 20% of the weighting in the index – with mining giants such as BHP Group or Rio Tinto. Other important sectors are biotechnology, real estate, consumer staples, and industrials.

Many different factors drive the ASX 200, but mainly it is the aggregate performance of the component companies revealed in their quarterly and annual earnings reports the main factor behind its performance. Commodity prices can also affect the index given its significant share of mining companies. Macroeconomic data such as Gross Domestic Product (GDP) growth, inflation, or unemployment data from Australia is also important as they are indicators of the health of the country’s economy and thus the profitability of its largest companies. Global economic conditions may also play a role, particularly from China, as the Asian country is Australia’s largest trading partner.

The level of interest rates in Australia, set by the Reserve Bank of Australia (RBA), also influences the ASX 200 and ASX 300 indexes as it affects the cost of credit, on which many firms are heavily reliant. Generally, when the RBA cuts interest rates (or signals it is going to do it), it is positive for the Australian stock market as it means a lower cost of credit for companies and higher economic growth ahead, likely boosting sales. On the contrary, if the RBA signals that it will increase interest rates, this tends to weigh on the index. As always, there is a caveat: banks. Financial institutions tend to benefit from higher interest rates because they earn more from lending to other businesses, thus boosting their overall income.

 

01:17
PBoC sets USD/CNY reference rate at 7.0948 vs. 7.0946 previous

On Thursday, the People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead at 7.0948 as compared to the previous day's fix of 7.0946 and 7.2259 Reuters estimates.

00:59
WTI turns red near $81.50 on Fed’s hawkish comments, a surprise jump in US crude stockpiles
  • TI trades on a softer note near $81.50 on Thursday. 
  • The high-for-longer rate narrative from the Fed boosts the US Dollar. 
  • US crude oil inventories rose by 3.165 million barrels for the week ending March 22 from a decline of 1.952 million barrels. 

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $81.50 on Wednesday. WTI prices edge lower amid the recovery of the US Dollar (USD) and a surprise jump in U.S. crude and gasoline stocks.

The hawkish comments from US Federal Reserve (Fed) policymaker early Thursday lift the Greenback across the board. The Fed Governor Christopher Waller, one of the most hawkish Fed officials, said that the US central bank is not in a hurry to lower the benchmark interest rate and may need to retain the current rate target for longer than previously expected. A firmer USD weighs on WTI prices as it makes dollar-denominated oil more expensive for holders of other currencies, dampening oil demand.

Additionally, US crude oil inventories rose by 3.165 million barrels for the week ending March 22 from a decline of 1.952 million barrels, according to the Energy Information Administration (EIA). A surprise US crude inventories build also contributed to the pressure on WTI prices.

On the other hand, the escalating geopolitical tensions in the Middle East and between Russia and Ukraine could raise the fear of tighter global supply and cap the downside of WTI prices. Ukraine has been striking Russia's oil infrastructure since the start of the conflict but intensified its attacks in late 2023. There have been seven drone attacks this month alone, and experts estimate that the disruptions have impacted almost 12% of Russia's total oil processing capacity.

The Organisation of Petroleum Exporting Countries and its allies (OPEC+) decided to extend output cuts of around 2.2 million bpd until the end of June. OPEC+ is expected to affirm its production cuts policy until a full ministerial meeting in June. 

Oil traders will watch the US Gross Domestic Product Annualized (GDP) for the fourth quarter (Q4) on Thursday, which is estimated to remain steady at 3.2%. On Friday, the US Personal Consumption Expenditures Price Index (PCE) data for February and Fed’s Powell will be in the spotlight. 

 

WTI US OIL

Overview
Today last price 81.5
Today Daily Change 0.01
Today Daily Change % 0.01
Today daily open 81.49
 
Trends
Daily SMA20 79.78
Daily SMA50 77.63
Daily SMA100 75.65
Daily SMA200 78.56
 
Levels
Previous Daily High 81.51
Previous Daily Low 80.35
Previous Weekly High 83.05
Previous Weekly Low 80.24
Previous Monthly High 79.27
Previous Monthly Low 71.46
Daily Fibonacci 38.2% 81.07
Daily Fibonacci 61.8% 80.79
Daily Pivot Point S1 80.72
Daily Pivot Point S2 79.96
Daily Pivot Point S3 79.56
Daily Pivot Point R1 81.89
Daily Pivot Point R2 82.28
Daily Pivot Point R3 83.05

 

 

00:33
Australia’s Retail Sales rises 0.3% MoM in February vs. 0.4% expected

Australia’s Retail Sales, a measure of the country’s consumer spending, rose 0.3% MoM in February from the previous reading of a 1.1% rise, according to the official data published by the Australian Bureau of Statistics (ABS) on Thursday. The figure came in weaker than market expectations with an increase of 0.4%.

Market reaction

Following the downbeat Australia’s Retail Sales data, the AUD/USD pair is down 0.11% on the day at 0.6527.

 

Australian Dollar FAQs

One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

 

00:31
Australia Private Sector Credit (YoY) rose from previous 4.9% to 5% in February
00:30
Australia Private Sector Credit (MoM) rose from previous 0.4% to 0.5% in February
00:30
Australia Retail Sales s.a. (MoM) below forecasts (0.4%) in February: Actual (0.3%)
00:30
Stocks. Daily history for Wednesday, March 27, 2024
Index Change, points Closed Change, %
NIKKEI 225 364.7 40762.73 0.9
Hang Seng -225.48 16392.84 -1.36
KOSPI -1.98 2755.11 -0.07
ASX 200 39.4 7819.6 0.51
DAX 92.74 18477.09 0.5
CAC 40 20.06 8204.81 0.25
Dow Jones 477.75 39760.08 1.22
S&P 500 44.91 5248.49 0.86
NASDAQ Composite 83.82 16399.52 0.51
00:15
Currencies. Daily history for Wednesday, March 27, 2024
Pare Closed Change, %
AUDUSD 0.65321 0.01
EURJPY 163.684 -0.21
EURUSD 1.08266 -0.05
GBPJPY 191.067 -0.08
GBPUSD 1.26367 0.07
NZDUSD 0.60023 0
USDCAD 1.35666 -0.14
USDCHF 0.90357 -0.02
USDJPY 151.251 -0.19
00:10
BoJ’s Summary of Opinions: YCC, negative rate, and other massive stimulus tools have accomplished their roles

Bank of Japan (BoJ) published the Summary of Opinions from its March monetary policy meeting on March 18 and 19, with the key findings noted below.

Key quotes

“One member said YCC, negative rate, and other massive stimulus tools have accomplished their roles.”

“One member said BoJ must guide monetary policy using short-term rate as main policy means, in accordance to economic, price, and financial developments.”

“One member said shifting to 'normal' monetary easing is possible without causing short-term shocks, may have a positive impact on the economy in medium-, long-term perspective.”

“One member said chance of policy shift causing big market volatility is small.”

“One member said future policy guidance very important so that BoJ can slowly but steadily proceed with policy normalization.”

“One member said appropriate to give some room for allowance in BoJ's bond buying operation.”

“One member said appropriate to revise policy after confirming that smaller firms are able to sufficiently hike wages.”

“One member said ending YCC and negative rate simultaneously could cause disruption in long-term rate, financial environment.”

“One member said changing policy now could delay achievement of BoJ's price target.”

“One member said important to make use of expected outcome from BoJ's policy review in future policy guidance.”

“One member said Japan's low natural rate of interest, lagged effect of monetary policy may be behind slow recovery pace of economy.”

“One member said virtuous cycle between wages and prices has become more solid.”

“One member said highly likely that mechanism behind price developments will be consistent with price target.”

Market reaction

Following the BoJ’s Summary of Opinions, the USD/JPY pair is losing 0.02% on the day to trade at 151.30, as of writing.

 

Bank of Japan FAQs

The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.

The Bank of Japan has embarked in an ultra-loose monetary policy since 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds.

The Bank’s massive stimulus has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy of holding down rates has led to a widening differential with other currencies, dragging down the value of the Yen.

A weaker Yen and the spike in global energy prices have led to an increase in Japanese inflation, which has exceeded the BoJ’s 2% target. Still, the Bank judges that the sustainable and stable achievement of the 2% target has not yet come in sight, so any sudden change in the current policy looks unlikely.

 

00:02
Australia Consumer Inflation Expectations declined to 4.3% in March from previous 4.5%
00:00
New Zealand ANZ Business Confidence declined to 22.9 in March from previous 34.7

FOREIGN EXCHANGE MARKET NEWS

CURRENCY MARKET DEFINITION
The concept of currency market has several definitions:

  • Currency market is the sphere of economic relations that are manifested in the purchase and sale of currency values (foreign currency, securities in foreign currency), as well as operations related to the investment of capital in foreign currency;
  • Currency market is a financial center where currency purchase and sale transactions based on supply and demand for them are concentrated;
  • Curency market is a whole of authorized banks, investment companies, brokerages, exchanges, and foreign banks that perform foreign exchange operations.
  • Currency market is a whole of communications systems that link banks in different countries that conduct international currency transactions.

Simply put, currency market is the market where currency transactions are made, that is, the currency of one country is exchanged for the currency of another country at a certain exchange rate. The exchange rate is the relative price of currencies of two countries or the currency of one country expressed in another country's monetary units.

Currency market is part of the global financial market, where many operations related to the global movement of capital take place.

TYPES OF MARKETS. RUSSIAN AND INTERNATIONAL CURRENCY MARKETS
There are international and domestic currency markets.

Domestic currency market — is a market within a single country.

The international currency market — is a global market that covers currency markets of all countries in the world. It does not have a specific site where trading is carried out. All operations within it are carried out through a system of cable and satellite channels that link the world's regional currency markets. Regional markets today include the Asian (with centers in Tokyo, Hong Kong, Singapore, and Melbourne), the European (London, Frankfurt am Main, and Zurich), and the American (New York, Chicago, and Los Angeles) markets.

Currency trading on the international currency market is carried out on the basis of market exchange rates, which are set on the basis of supply and demand in the market and under the influence of various macroeconomic data. Forex is the international currency market.

Currency markets can also be divided into exchange and over-the-counter markets. Exchange currency market is an organized market where trading is carried out through an exchange—a special company that sets trading rules and provides all the conditions for organizing trading under these rules.

Over-the-counter currency market — is a market where there are no certain trading rules, and purchase and sale operations are not linked to a specific place of trade, as opposed to the case of an exchange.

As a rule, an over-the-counter currency market is organized by special companies that provide services for the purchase and sale of currencies, which may or may not be members of the currency exchange. Trading operations in this market are now carried out mainly via the Internet.

The over-the-counter currency market is much larger than the exchange market in terms of trading volume. The Forex international over-the-counter currency market is considered the most liquid in the world. It operates around the clock in all financial centers of the world (from New York to Tokyo).

CURRENCY MARKET FUNCTIONS
Currency market— is the most important platform for ensuring the normal course of all global economic processes.

The main macroeconomic functions of the currency market are:

  • creating conditions for the subjects of foreign exchange relations to make timely international current and capital payments and thereby promoting the development of foreign trade;
  • providing conditions and mechanisms for the implementation of monetary and economic policy of the state;
  • diversifying foreign exchange reserves;
  • forming the exchange rate under the influence of supply and demand;

NEWS IMPACT
Various currencies are the main trading tool in the currency market. Exchange rates are formed under the influence of supply and demand in the market.

In addition to that, currency rates are influenced by many fundamental factors related to the global economic situation, events in national economies, and political decisions.

News about these factors can be found in various sources:

  • Reports showing a country´s level of economic development.

The more stable an economy is developing, the more stable its currency is. Accordingly, it is possible to predict how the currency will behave in the near future, based on statistical data published in official sources of countries with a certain regularity.
This data includes:

  • GDP
  • unemployment;
  • return on equity;
  • consumer price index;
  • industrial price index;
  • propensity to consume;
  • salaries outside of the agricultural sector;
  • residential construction, etc.

Interest rate level, set by national authorities regulating credit policy, is an equally important indicator. In the European Union, this is ECB–the European Central Bank, in the US, this is the Federal Reserve System, in Japan—the Bank of Japan, in the UK—the Bank of England, in Switzerland—the Swiss national Bank, etc.

The interest rate level is determined at meetings of the national central bank. Then, the decision on the rate is published in official sources. If the central bank of a country reduces the interest rate, the money supply in the country increases, and the national currency depreciates against other world currencies. If the interest rate increases, the national currency will strengthen.

  • Speeches of country leaders, leading economists and analysts.

A speech or even a separate statement by a country's leader can reverse a trend. Speeches on these topics may change the currency exchange rate:

  • analysis of the situation on the currency market;
  • changes in monetary or economic policy;
  • adoption of a budget policy;
  • forecasts of the economic situation, etc.

All this news is published in various sources. Major international news is more or less easy to find in Russian, but news related to the domestic economic policy and the economy of foreign countries is much less common in the Russian press. Mostly, such news is published by the national media and in the language of the country where the news is published.

It is very difficult for one person to follow all the news at once, and they are likely to miss some important event that can turn the whole situation on the market upside down. Guided by our main principle—to create the best trading conditions for our customers—we try to select the most important news from all over the world and publish them on our website.

The TeleTRADE Department of Analytics monitors news on most national and international news sources on a daily basis and identifies those that can potentially affect exchange rates. These are the main news items that are included in our news feed.

In addition, all our clients have free access to the Dow Jones news feed. This is a joint project of Dow Jones Newswires, the world's largest news agency, and the leading Russian news agency Prime-TASS. The news feed is created specifically for currency traders and those who are interested in getting information about the world's currency markets.

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