The Greenback regained composure and bounced off multi-month lows as traders continued to assess the Fed’s 50-bps interest rate cut in quite a volatile session on Wednesday.
Here is what you need to know on Thursday, September 19:
The US Dollar Index (DXY) weakened to the 100.20 region, just to rebound afterwards and reclaim the 101.00 hurdle and beyond in the wake of the FOMC event. The usual weekly Initial Jobless Claims are due on September 19, seconded by the Philly Fed Manufacturing Index, the CB Leading Index, and Existing Home Sales.
EUR/USD faded the initial uptick to multi-week tops in the 1.1190 zone, coming under pressure and briefly piercing the 1.1100 support late on Wednesday. On September 19, the Current Account results in the broader euro bloc are due, along with a speech by the ECB’s Schnabel.
GBP/USD advanced to yearly highs near the 1.3300 barrier on the back of the downward bias in the US Dollar and mixed UK CPI data. The BoE meets on September 19 and is expected to leave its policy rate unchanged.
USD/JPY resumed its downtrend and partially faded Tuesday’s pullback following the Fed meeting. The weekly Foreign Bond Investment figures are only due on September 19.
AUD/USD could not sustain a move to the 0.6800 area, relinquishing gains and eventually receding to the 0.6750 zone. The release of the Australian labour market report takes centre stage early on September 19.
WTI prices added to losses recorded in the previous day despite the weak dollar and the resurgence of geopolitical effervescence in the Middle East.
Prices of Gold rose to record tops around the $2,600 per ounce troy, although prices lost momentum and eventually ended with marked losses. Silver prices, on the other hand, tumbled to four-day lows in the sub-$30.00 region per ounce.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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