Global markets navigated within a consolidative theme as investors warmed up ahead of key US data releases, which will surely have an impact on bets on an interest rate cut by the Fed and give further insight on the health of the US economy.
Here is what you need to know on Tuesday, August 13:
The USD Index (DXY) alternated gains with losses around the 103.20 zone amidst the generalized flattish mood in global markets. On August 13, Producer Prices will be at the centre of the debate as well as the speech by the Fed’s R. Bostic.
EUR/USD managed to reverse part of the recent multi-day bearishness, advancing modestly to the vicinity of 1.0940. The Economic Sentiment tracked by the ZEW institute in both Germany and the euro area take centre stage on August 13 on the domestic calendar.
GBP/USD expanded its recovery and came just pips away of the key 1.2800 the figure. The UK labour market report will be the salient event across the Channel on August 13.
Further depreciation of the Japanese yen prompted USD/JPY to gather fresh impulse and surpass the 148.00 hurdle, although the pair faded a big chunk of that move towards the end of the day. Producer Prices are due in Japan on August 13.
The resurgence of the bullish trend saw AUD/USD briefly test waters above the 0.6600 barrier, a region where the key 200-day SMA also coincides. On August 13, Westpac’s Consumer Confidence Index is due, seconded by the Wage Price Index.
Prices of WTI rose for the fourth session in a row and surpassed the $79.00 mark per barrel, helped by rising geopolitical concerns and hopes of the start of the easing cycle by the Fed in September.
Prices of Gold climbed to multi-day highs near $2,470 per ounce troy following the vacillating price action in the Greenback and lower US yields, while geopolitical effervescence and hopes of rate cuts by the Fed adding to the sentiment. In the same line, Silver advanced to five-day highs and flirted with the key $28.00 mark 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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