Here is what you need to know for Friday, September 16:
The US dollar keeps its dominance as the case for ongoing aggressive hikes by the Federal Reserve dominates the markets. DXY, which measures the greenback vs. a basket of major rivals ended the North American session flat but put in a high of 109.21 within the upper end of this week's bullish channel having climbed from a low of 109.42
Retail Sales moved up 0.3% last month and the US dollar has held near recent peaks, supported by the view that the Federal Reserve will keep tightening policy aggressively. The data of late, including this week's surprise increase in consumer prices in August, has reinforced the bullish case for the greenback as investors price in a third consecutive 75-basis-point rate hike next Wednesday.
Meanwhile, the US 10-year yield climbed 5bps to 3.45%, and key majors, such as the yen came back under pressure despite authorities that verbally intervened, jawboning the currency following sharp declines.USD/JPY fell to 143.33.
GBP/USD bulls were attempting a correction from an important support area near the midpoint of the 1.1400 area, with the price recovering from a low of 1.1462 and now testing the bear's commitments at 1.1500.
EUR/USD remained trapped between a key 4-hour channel and consolidated ahead of 1.0025 and 0.995 breakout levels. On an hourly basis, the pair moved sideways, coiling for a move either way.
As for the Australian dollar, it traded between a daily high at around 0.6770 and the bears moved in on the key 0.67 level, piercing it to a low of 0.6899. The price levelled out after yesterday's employment report was solid, adding 33.5K employments in August, in line with forecasts, while the unemployment rate rose to 3.5% from 3.4%. ANZ bank analysts expect that the Reserve Bank of Australia (RBA) will lift rates by 50 bps.“An overall solid labor market report adds to the case made by the strong NAB business survey and US CPI data earlier this week for the RBA to hike the cash rate 50bp in October,” said analysts at ANZ. This brings the market into a consolidation phase into the weekend.
On the commodities front, WTI fell to $84.9/bbl as the US Department of Energy said their restocking of oil reserves would likely involve deliveries after the fiscal year 2023. Gold slipped 1.4% to $1,662.
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