News en

Bets for interest rate cuts in June by the Fed and ECB helped the pair. Investors expect the ECB to keep its rate unchanged next week. EUR/USD maintained the positive streak in the weekly chart. EUR/USD managed to clinch its second consecutive week of gains despite a lacklustre price action in the first half of the week, where the European currency slipped back below the 1.0800 key support against the US Dollar (USD). Fed and ECB rate cut bets remained in the fore It was another week dominated by investors’ speculation around the timing of the start of the easing cycle by both the Federal Reserve (Fed) and the European Central Bank (ECB). Around the Fed, the generalized hawkish comments from rate-setters, along with the persistently firm domestic fundamentals, initially suggest that the likelihood of a “soft landing” remains everything but mitigated. In this context, the chances of an interest rate reduction in June remained well on the rise.  On the latter, Richmond Fed President Thomas Barkin went even further on Friday and suggested that the Fed might not reduce its rates at all this year. Meanwhile, the CME Group’s FedWatch Tool continues to see a rate cut at the… Read More »EUR/USD Weekly Forecast: Euro gains for second straight week as traders reassess Fed, ECB rate cut bets

Pound Sterling turned south after facing rejection at 1.2700 against the US Dollar. US Nonfarm Payrolls and Powell’s testimony to hog the limelight in the week ahead. Looking ahead, GBP/USD buyers stay hopeful whilst above the 200-day SMA at 1.2576. The Pound Sterling (GBP) returned to red against the US Dollar (USD), reversing the previous week’s rebound. GBP/USD ran into offers once again near 1.2700, as the US Dollar (USD) paused its corrective downside. Pound Sterling eases as US Dollar stalls correction The Pound Sterling failed to sustain the previous week’s upbeat momentum and gave into the modest rebound staged by the US Dollar, as the sentiment around the Greenback continued to be supported by the expectations of delayed interest rate cuts by the US Federal Reserve (Fed). The US Dollar paused its correction from three-month highs, despite softening Core Personal Consumption Expenditures – Price Index (PCE), as the probability for a June Fed rate cut remained more or less the same. The Fed’s preferred inflation gauge aligned with estimates of 2.8% YoY in January but eased from December’s 2.9% increase. The Greenback also drew support from the recent hawkish comments from several Fed policymakers, who continued to push back… Read More »GBP/USD Weekly Forecast: Pound Sterling down but not out as busy US calendar looms

Gold climbed to a fresh one-month high above $2,050 this week. The technical outlook points to a slightly bullish tilt in the near term. February labor market data from the US could trigger a big reaction in XAU/USD. Gold (XAU/USD) gathered bullish momentum and reached its highest level since early February above $2,050 on Friday after spending the first half of the week consolidating in a tight channel. The near-term technical outlook for XAU/USD offers encouraging signs for buyers, but investors could ignore technical readings when reacting to February labor market data from the US next week. Gold price rose as US yields edged lower In the absence of high-tier macroeconomic data releases, the action in financial markets remained subdued at the beginning of the week and Gold closed the first two trading days with minor changes. The data from the US showed on Tuesday that Durable Goods Orders declined by 6.1% on a monthly basis, but this reading failed to trigger a noticeable reaction. On Wednesday, the US Bureau of Economic Analysis (BEA) announced that it revised the annualized Gross Domestic Product (GDP) growth to 3.2% from 3.3% in the initial estimate. The US Dollar (USD) came under modest… Read More »Gold Weekly Forecast: XAU/USD locks in second week of gains as US inflation abates

EUR/USD stabilized above 1.0800 after closing in negative territory on Thursday. Inflation data from the Eurozone could drive the Euro’s valuation. The US economic docket will feature ISM Manufacturing PMI for February. EUR/USD came under bearish pressure during the American trading hours on Thursday and closed the third consecutive day in negative territory. Although the pair manages to hold steady above 1.0800 on Friday, it could have a difficult time extending its recovery unless the Eurozone inflation data support the Euro. Inflation in the US, as measured by the change in Personal Consumption Expenditures (PCE) Price Index, declined to 2.4% on a yearly basis in January, the US Bureau of Economic Analysis reported on Thursday. The Core PCE Price Index, which excludes volatile food and energy prices, rose 2.8% on a yearly basis, matching analysts’ estimate.  Hawkish comments from Federal Reserve (Fed) policymakers following the inflation data helped the US Dollar (USD) outperform its rivals and caused EUR/USD to turn south. Atlanta Fed President Raphael Bostic said that it might be appropriate to start reducing rates in summer, San Francisco Fed President Mary Daly argued that cutting rates too quickly could cause inflation to get stuck and Cleveland Fed President Loretta Mester… Read More »EUR/USD Forecast: Euro needs strong EU inflation readings to extend rebound

Gold price sits at four-week highs of $2,051, eyeing a second straight weekly gain. US Dollar keeps the red with the Treasury yields after soft US Core PCE inflation data. Gold price confirmed a pennant breakout on the daily chart on Thursday. Gold price is consolidating near four-week highs of $2,051, gathering pace for the next push higher. A renewed weakness in the US Dollar (USD) alongside the US Treasury bond yields is prompting Gold buyers to take a breather ahead of another top-tier US economic data in the ISM Manufacturing PMI due later on Friday. ahead of the all-important data due later in the day. Gold price eyes US ISM PMI for further upside The US Dollar is seeing a fresh selling interest against its major counterparts after two straight days of gains, as risk sentiment remains in a sweeter spot on the final trading day of the week. Sluggish performance in the US Treasury bond yields could be also attributed to the underlying downbeat tone around the Greenback. Gold price is holding its three-day winning streak amid a broadly softer US Dollar and the US Treasury bond yields, also benefiting from the improvement in the Chinese services and… Read More »Gold Price Forecast: XAU/USD eyes a weekly close above $2,050 and US ISM PMI

China’s manufacturing sector continued its contraction for the fifth consecutive month, signalling ongoing sluggishness in the world’s second-largest economy as Beijing prepares to unveil its annual growth target at the upcoming meeting of its always agreeable with President Xi parliament. The official manufacturing Purchasing Managers’ Index (PMI) for February stood at 49.1, in line with the median forecast of analysts surveyed by Reuters. This figure was slightly lower than January’s reading of 49.2; hence, the sector is still wallowing in contraction territory. On the other hand, the non-manufacturing PMI, which encompasses services and construction, recorded a reading of 51.4 and surpassed analyst expectations and marked an improvement from January’s figure of 50.7 and, in no small part due to the policymaker’s efforts to stabilize the property sectors. Still, The mixed performance across different sectors underscores the challenges policymakers face to get the demand side of the economy revving on all cylinders. While services and construction show signs of rebounding, the manufacturing sector continues to grapple with headwinds and subdued activity levels. The Yen remains in focus, with FX traders getting on and off the Bank Of Japan policy game of chance wheel. Outside of month-end Yen rebalancing swings, Governor Kazuo… Read More »China’s economy still not revving in all cylinders

AUD/USD traded on the defensive and broke below 0.6500. Further weakness could drag spot to the 2024 lows. Retail Sales in Australia increased 1.1% MoM in January. AUD/USD added to Wednesday’s decline and breached the key support at 0.6500 on the back of the firmer note in the US Dollar (DXY) on Thursday. Further loss of traction in the pair came amidst the increasing pick up in upside momentum in the Greenback, particularly after US inflation figures gauged by the PCE showed that disinflationary pressure remains well in place in the US economy, although comments from Fed officials continued to signal a potential rate reduction in June. In the meantime, the Aussie dollar suffered another slump in iron ore prices, which retreated sharply to levels last seen in late August near the $110 mark per tonne, always on the back of omnipresent concerns surrounding the still-absent economic rebound in China. Although potential stimulus measures in China may offer temporary support for a rebound, it is the sustained recovery news from the country that holds greater significance in providing stronger support to the Australian dollar and potentially initiating a more significant upward trend in AUD/USD. A revival in the Chinese economy… Read More »AUD/USD Forecast: Sellers remain in control of the sentiment

Markets Amid persistent optimism surrounding artificial intelligence, Thursday saw the S&P 500 and Nasdaq Composite continue their ascent, marking a positive trend for the major averages as they headed towards a successful month for investors. This positive momentum persisted despite the release of the consensus PCE print. The personal consumption expenditures price index, considered the Federal Reserve’s preferred inflation gauge, showed a 0.3% rise in January compared to December. Similarly, the core index, which excludes volatile food and energy prices, saw a 0.4% increase. These figures aligned with economists’ expectations, and given the upward trajectory of stocks throughout the year; some investors perceived the absence of hotter-than-expected inflation news as a less problematic macro signal. Indeed, market participants continue to focus on the broader bullish sentiment, especially in sectors associated with artificial intelligence, which continues to drive the sustained upward trajectory of major market indices. This trend persists despite indications of sticky inflation at the beginning of the year. The resilience of investor optimism in sectors related to artificial intelligence underscores broader confidence in the potential for technological innovation to fuel economic growth and corporate performance. All in all, at the end of the day, it seems that investors were… Read More »Investors skirt a warm PCE inflation print

EUR/USD stays below 1.0850 in the European morning on Thursday. German and US inflation data will be watched closely by market participants. The pair faces key near-term support level at 1.0800. EUR/USD recovered from the weekly low it touched below 1.0800 and ended the day virtually unchanged on Wednesday. The pair fluctuates in a tight range near 1.0850 early Thursday as investors await key data releases. The data from France showed on Thursday that the Consumer Price Index (CPI) rose 0.9% on a monthly basis, surpassing the market expectation for a 0.7% increase. This reading helped the Euro edge higher in the early European session.

Markets Unless you were out caving, like Lando Norris was and missed out on when the Lewis Hamilton to Ferrari news broke, you likely heard that Equities hit fresh record highs last week in several markets from Europe to Japan. In North America, the rally was fuelled by a stellar earnings report by Nvidia on Wednesday, which sparked broader exuberance on AI’s benefits and resulted in the largest single-day value creation event in US stock-market history. In classic melt-up fashion, a stampede of investors has been gobbling up virtually every investible asset with some attachment to Nvidia, leaving bewildered bears in the wake. While one might have anticipated some profit-taking on Friday, it may very well occur to some extent this week ahead of the PCE. Still, with call skew experiencing a crazy surge in demand as investors seek upside protection, it suggests that investors of all stripes could be coming around the idea that Nvidia is not a bubble. Indeed, we are only at the start of the runway, so it’s conceivable that the AI plane has not yet taken full flight. Financial markets have adjusted their rates expectations, now pricing 75-100 basis points of Federal Reserve interest rate cuts for… Read More »The Fed’s favoured measure of inflation on tap “the PCE deflator“