Posted at 03 October 2023 / Categories Market Roundups
Market Roundup
•Dollar/yen move lower looks like intervention -analysts
•Japan MOF official declines to comment on dollar/yen move
• US Redbook (YoY) 3.5% ,3.8% previous
• US Aug JOLTs Job Openings 9.610M, 8.800M forecast, 8.827M previous
• US IBD/TIPP Economic Optimism 36.3, 41.6 forecast, 43.2 previous
• GlobalDairyTrade Price Index 4.4 %,4.6% previous
Looking Ahead Economic Data (GMT)
•01:00 New Zealand RBNZ Interest Rate Decision 5.50% forecast, 5.50% previous
Looking Ahead Events And Other Releases(GMT)
•01:00 New Zealand RBNZ Rate Statement
Currency Forecast
EUR/USD: The euro declined on Tuesday as dollar gained after U.S. job openings rose more than expected in August, in another sign of a resilient economy that points to the Federal Reserve keeping interest rates higher for longer. U.S. job openings unexpectedly increased in August, pointing to tight labour market conditions that could compel the U.S. Federal Reserve to raise interest rates next month.The euro bottomed at $1.0448 on Tuesday, its lowest since December, and was last at $1.0469. Immediate resistance can be seen at 1.0518 (5DMA), an upside break can trigger rise towards 1.0546(38.2%fib).On the downside, immediate support is seen at 1.0460 (23.6%fib), a break below could take the pair towards 1.0427(Lower BB).
GBP/USD: Sterling fell to a new 6-1/2-month low against the dollar on Tuesday on concerns about the economic outlook and expectations that the Bank of England might be done with rate hikes. The gloom around the U.K. economy cleared a bit last week, as growth for the year's first quarter was revised significantly upwards. Still, concerns about the state of the economy recently supported the pound selloff.Britain's economy displayed apparent recession signals a couple of weeks ago, a day after the Bank of England called to halt its long run of interest rate increases. Sterling hit $1.2061, its lowest level since mid-March. Immediate resistance can be seen at 1.2144(5DMA), an upside break can trigger rise towards 1.2177 (38.2%fib).On the downside, immediate support is seen at 1.2066 (23.6%fib), a break below could take the pair towards 1.2033(Lower BB).
USD/CAD: The Canadian dollar weakened to a six-month low against its U.S. counterpart on Tuesday as surging long-term borrowing costs spooked investors and despite hawkish comments from a Bank of Canada policymaker. Canadian businesses have made larger and more frequent price changes since the pandemic, passing on higher costs to consumers, and that behavior could stoke inflation, Bank of Canada Deputy Governor Nicolas Vincent said. Money markets see a 64% chance that the BoC will tighten further by the end of the year. The benchmark rate was lifted in July to a 22-year high of 5%.The price of oil, one of Canada's major exports, rebounded from a three-week low. U.S. crude oil futures were up 0.8% at $89.57 a barrel.Immediate resistance can be seen at 1.3733(38.2%fib), an upside break can trigger rise towards 1.3787(23.6%fib).On the downside, immediate support is seen at 1.3680 (50%fib), a break below could take the pair towards 1.3633 (61.8%fib).
USD/JPY: The dollar initially rose but later fell sharply against the yen after breaching the key 150 level leading some to suspect intervention by Japanese monetary officials to halt the yen's fall. Japanese Finance Minister Shunichi Suzuki said on Tuesday authorities were watching the currency market closely and stood ready to respond, but also said any decision on currency market intervention would be based on volatility, not specific yen levels.A senior Japanese ministry of finance official declined to comment on whether Japan had intervened in foreign exchange markets.The dollar fell as low as 147.30 yen versus the Japanese currency, after hitting a one-year high of 150.165. Strong resistance can be seen at 149.89(23.6%fib) an upside break can trigger rise towards 150.09 (Higher BB).On the downside, immediate support is seen 149.04(5DMA), a break below could take the pair towards 148.18 (38.2%fib).
Equities Recap
European shares sank to fresh six-month lows on Tuesday, dragged lower by rate-sensitive utilities and miners as bets that U.S. interest rates will remain elevated for a prolonged period boosted Treasury yields and the dollar.
UK's benchmark FTSE 100 closed down by 0.54 percent, Germany's Dax ended down by 1.06 percent, France’s CAC finished the day down by 1. 01 percent.
The S&P 500 index closed at its lowest level since June 1 on Tuesday as economic data underscored the view the Federal Reserve may need to keep interest rates high.
Dow Jones closed down by 1.29 percent, S&P 500 ended down by 1.37 percent, Nasdaq finished the day down by 1.87 percent.
Commodities Recap
Gold prices languished near a seven-month low on Tuesday, weighed down by a robust dollar and elevated bond yields as the likelihood of U.S. interest rates staying higher for longer dominated sentiment.
Spot gold was down 0.1% at $1,825.09 per ounce at 1:49 p.m. EDT (1749 GMT), after hitting its lowest level since early March.U.S. gold futures settled 0.3% lower at $1,841.50 per ounce.
Oil prices recovered to settle slightly higher on Tuesday after sinking to three-week lows, pressured by a stronger U.S. dollar and darkening global economic signals but supported by tightening crude supply.
Brent crude oil futures settled 21 cents higher at $90.92 a barrel, after falling to a session low of $89.50, the lowest since Sept. 8.
U.S. West Texas Intermediate crude (WTI) , settled up 41 cents at $89.23 per barrel. The session low was $87.76, the weakest since Sept. 12.