Market Trading News and Research from 29 March 2024

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29.03.2024
06:00
US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount
  • The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February.
  • Markets see a strong chance of the Federal Reserve lowering the policy rate by 25 basis points in June.
  • The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.

The core Personal Consumption Expenditures (PCE) Price Index, the US Federal Reserve’s (Fed) preferred inflation measure, will be published on Friday by the US Bureau of Economic Analysis (BEA) at 12:30 GMT.

What to expect in the Federal Reserve’s preferred PCE inflation report?

The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in February, at a slightly softer pace than the 0.4% increase recorded in January. February core PCE is also projected to grow at an annual pace of 2.8%, matching the previous reading. The headline PCE inflation is forecast to tick up to 2.5% (YoY).

The Federal Reserve’s revised Summary of Economic Projections (SEP), also known as the dot plot– published alongside the policy statement after the March meeting – showed that policymakers expect the annual core PCE inflation to be at 2.6% at the end of 2024, up from the 2.4% forecast seen in the December SEP. 

When commenting on the policy outlook in the post-meeting press conference, Fed Chairman Jerome Powell reiterated that they need greater confidence of inflation moving sustainably down toward the 2% target before they start lowering the policy rate. Powell, however, argued that strong inflation numbers in January were impacted by seasonal effects. 

Previewing the PCE inflation report, “Given still robust increases in the Feb CPI/PPI data, we look for another firm gain for the core PCE — though notably down from January's 0.42% increase and from the core CPI's 0.36% m/m February gain,” said Oscar Munoz, Chief US Macro Strategist at TD Securities, in a weekly report.

When will the PCE inflation report be released, and how could it affect EUR/USD?

The PCE inflation data is slated for release at 12:30 GMT. The monthly core PCE Price Index gauge is the most-preferred inflation reading by the Fed, as it’s not distorted by base effects and provides a clear view of underlying inflation by excluding volatile items. Investors, therefore, pay close attention to the monthly core PCE figure.

Stronger-than-forecast Consumer Price Index (CPI) and Producer Price Index (PPI) readings in January and February, combined with data that pointed to tight labor market conditions, caused markets to lean toward a delay in the Fed policy pivot from May to June. Nevertheless, the dot plot showed that policymakers still project the US central bank to cut the policy rate by a total of 75 basis points (bps) in 2024. Hence, markets are pricing in a more than 60% chance that the Fed will lower the policy rate by 25 bps to 5%-5.25% in June, according to the CME FedWatch Tool.

It will be tricky to assess the immediate impact of the PCE data on the US Dollar’s (USD) valuation because trading conditions will be thin on Easter Friday.

Even if the monthly core PCE Price Index rises at a stronger pace than expected, it might not be enough to cause investors to reassess the possibility of another policy hold in June. Nevertheless, it could still provide a boost to the USD, with markets doubting the size of the total reduction in the policy rate. 

On the other hand, an increase of 0.2% or less in the monthly Core PCE Price Index could weigh on the USD. In this scenario, a bearish opening in the 10-year US yield could be seen when the bond market returns to action at the weekly opening next Monday.

FXStreet Analyst Eren Sengezer offers a brief technical outlook for EUR/USD and explains:

“The 200-day Simple Moving Average (SMA) and the 100-day SMA form a strong resistance for EUR/USD at 1.0830. As long as this level stays intact as resistance, technical sellers could look to retain control. On the downside, 1.0760 (Fibonacci 78.6% retracement of the October-December uptrend) aligns as next support before 1.0700 (Fibonacci 61.8% retracement). In case EUR/USD manages to reclaim 1.0830, buyers could take action and open the door for an extended rebound toward 1.0900 (psychological level, static level) and 1.0950 (Fibonacci 23.6% retracement).

 

Fed FAQs

Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

 

05:55
GBP/USD Price Analysis: The first downside target is seen at the 1.2600–1.2605 zone GBPUSD
  • GBP/USD drifts lower to 1.2620 in Friday’s early European trading hours. 
  • The bearish outlook of the pair remains intact above the key EMA; RSI indicator supports the downward momentum. 
  • The first upside barrier is seen in the 1.2645–1.2650 region; the 1.2600–1.2605 zone acts as an initial support level. 

The GBP/USD pair trades on a weaker note around 1.2620 during the early European session on Friday. The decline of Pound Sterling (GBP) is backed by the growing speculation that the Bank of England (BoE) will begin the rate-cut cycle this year. Markets are fully pricing in the first rate cut in August, with a total of nearly three quarter-point interest rate cuts this year.

Technically, GBP/USD keeps the bearish vibe unchanged as the major pair is below the key 50- and 100-period Exponential Moving Average (EMA) on the four-hour chart. Furthermore, the Relative Strength Index (RSI) lies below the 50 midlines, suggesting the downward momentum of the pair and the further decline look favorable. 

The immediate resistance level for GBP/USD is seen in the 1.2645–1.2650 region, representing the confluence of the upper boundary of the Bollinger Band and the 50-period EMA. Any follow-through buying above the latter will expose the 100-period EMA at 1.2677. The additional upside filter to watch is a high of March 18 at 1.2746, en route to the 1.2800 psychological round mark.

On the downside, the lower limit of the Bollinger Band at the 1.2600–1.2605 zone acts as an initial support level for the major pair. A decisive break below this level will pave the way to a low of March 22 at 1.2575. The next downside target is located at a low of February 14 at 1.2535, and finally at the 1.2500 round figure. 

GBP/USD four-hour chart

GBP/USD

Overview
Today last price 1.262
Today Daily Change -0.0004
Today Daily Change % -0.03
Today daily open 1.2624
 
Trends
Daily SMA20 1.2719
Daily SMA50 1.2678
Daily SMA100 1.2653
Daily SMA200 1.259
 
Levels
Previous Daily High 1.2655
Previous Daily Low 1.2586
Previous Weekly High 1.2804
Previous Weekly Low 1.2575
Previous Monthly High 1.2773
Previous Monthly Low 1.2518
Daily Fibonacci 38.2% 1.2612
Daily Fibonacci 61.8% 1.2629
Daily Pivot Point S1 1.2588
Daily Pivot Point S2 1.2553
Daily Pivot Point S3 1.252
Daily Pivot Point R1 1.2657
Daily Pivot Point R2 1.269
Daily Pivot Point R3 1.2726

 

 

05:08
Japan Annualized Housing Starts: 0.795M (February) vs previous 0.802M
05:08
Japan Housing Starts (YoY) below forecasts (-5.5%) in February: Actual (-8.2%)
05:02
USD/CHF snaps the two-day losing streak above 0.9000 ahead of US PCE data USDCHF
  • USD/CHF holds the positive ground around 0.9025 on the firmer US Dollar. 
  • The high-for-longer US rate narrative might boost the Greenback against the CHF. 
  • SNB’s Schlegel said the SNB will monitor the FX rate closely and intervene if necessary. 

The USD/CHF pair snaps the two-day losing streak near 0.9025 on Friday during the Asian session. The hawkish comments from the US Federal Reserve (Fed) and strong US economic data boost the US Dollar (USD) and support USD/CHF. However, the upside of the pair might be limited amid the possibility that the Swiss National Bank (SNB) could intervene in the foreign exchange market. 

The Fed governor Christopher Waller said on Wednesday that the US central bank was in no rush to cut interest rates as elevated inflation indicated that the current rates needed more time to work. Meanwhile, Fed Governor Lisa Cook stated on Monday that the path of disinflation has been bumpy, but a cautious approach to further policy shifts can ensure that inflation will return sustainably to the 2% target. The high-for-longer US rate narrative might lift the Greenback and create a tailwind for the pair in the near term. 

On the other hand, the Swiss National Bank (SNB) Vice President Martin Schlegel said on Wednesday that the Swiss central bank will monitor the exchange rate closely and intervene in the foreign exchange market as necessary, even though it has no target for the Swiss Franc (CHF) exchange rate. Last week, the SNB surprised the market by cutting its benchmark interest rate for the first time in nine years, which triggered the sell-off in the CHF in previous sessions. The speculation of SNB’s intervention might cap the downside of the CHF against the USD.  

Additionally, the escalating geopolitical tensions in the Middle East might benefit safe-haven currencies like the Swiss Franc. The Palestinian Red Crescent said that Israeli forces besieged two more Gaza hospitals on Sunday, pinning down medical teams under heavy gunfire.

Later on Friday, the US Core Personal Consumption Expenditures (PCE) Price Index will be due. The Fed’s preferred inflation gauge is estimated to remain stable at 2.8% YoY. The market is likely to be mute in light trading on Good Friday.

USD/CHF

Overview
Today last price 0.9021
Today Daily Change 0.0005
Today Daily Change % 0.06
Today daily open 0.9016
 
Trends
Daily SMA20 0.8878
Daily SMA50 0.8794
Daily SMA100 0.8735
Daily SMA200 0.8818
 
Levels
Previous Daily High 0.9065
Previous Daily Low 0.9
Previous Weekly High 0.902
Previous Weekly Low 0.8822
Previous Monthly High 0.8886
Previous Monthly Low 0.8553
Daily Fibonacci 38.2% 0.9025
Daily Fibonacci 61.8% 0.904
Daily Pivot Point S1 0.8989
Daily Pivot Point S2 0.8962
Daily Pivot Point S3 0.8924
Daily Pivot Point R1 0.9054
Daily Pivot Point R2 0.9092
Daily Pivot Point R3 0.912

 


 

05:00
Japan Construction Orders (YoY) down to -11% in February from previous 9.1%
04:48
EUR/GBP drops to near 0.8540 following dovish comments from ECB's policymakers EURGBP
  • EUR/GBP edges lower on dovish remarks from ECB policymakers.
  • ECB’s Villeroy has expressed confidence in the ECB's inflation target of 2%, but he has also cautioned about the increasing downside risks.
  • BoE official Jonathan Haskel said that rate cuts should be "a long way off”.

EUR/GBP continues its downward movement, influenced by challenges facing the Euro following dovish comments from European Central Bank (ECB) policymaker Francois Villeroy. During the Asian session on Friday, the EUR/GBP cross depreciates to near 0.8540.

Villeroy highlighted a notable decline in core inflation. He expressed confidence in the ECB to achieve an inflation target of 2% but cautioned about escalating downside risks if the ECB hesitates to implement rate cuts.

Moreover, ECB executive board member Fabio Panetta emphasized on Thursday that the conditions for implementing monetary policy easing are emerging. He pointed out that restrictive policies are dampening demand, resulting in a rapid decrease in inflation. Panetta also indicated a reduction in risks to price stability.

The Pound Sterling (GBP) maintains its position, possibly due to the hawkish comments from the Bank of England official Jonathan Haskel. He said that rate cuts should be "a long way off," while his colleague Catherine Mann warned against overly high expectations for interest rate cuts this year.

Despite Bank of England officials expressing reluctance towards rate cuts, the British Pound (GBP) may have faced downward pressure following economic data indicating that the United Kingdom’s (UK) economy entered a recession in the second half of 2023. The nation's Gross Domestic Product (GDP) contracted by 0.3% quarter-on-quarter in the fourth quarter of 2023, in line with preliminary estimates.

Speculation persists that the Bank of England (BoE) will initiate three quarter-point reductions in rates throughout 2024. BoE Governor Andrew Bailey stated that interest rate cuts will be under consideration at future BoE policy meetings.

EUR/GBP

Overview
Today last price 0.8537
Today Daily Change -0.0009
Today Daily Change % -0.11
Today daily open 0.8546
 
Trends
Daily SMA20 0.8551
Daily SMA50 0.8548
Daily SMA100 0.8595
Daily SMA200 0.8608
 
Levels
Previous Daily High 0.8571
Previous Daily Low 0.8544
Previous Weekly High 0.8602
Previous Weekly Low 0.853
Previous Monthly High 0.8578
Previous Monthly Low 0.8498
Daily Fibonacci 38.2% 0.8554
Daily Fibonacci 61.8% 0.8561
Daily Pivot Point S1 0.8537
Daily Pivot Point S2 0.8527
Daily Pivot Point S3 0.851
Daily Pivot Point R1 0.8564
Daily Pivot Point R2 0.858
Daily Pivot Point R3 0.859

 

 

04:05
USD/CAD could halt losing streak amid a stronger Greenback, clings to 1.3540 USDCAD
  • USD/CAD holds its position after recovering daily losses on Friday.
  • US Dollar strengthens on hawkish sentiment surrounding the Fed maintaining higher policy rates.
  • Canadian Dollar received upward support from the higher WTI price.

USD/CAD hovers around 1.3540 during the Asian hours on Friday, showing signs of potentially ending its four-day losing streak. However, trading volumes are expected to be light due to Good Friday. The US Dollar's (USD) strength may be attributed to the hawkish sentiment surrounding the Federal Reserve's intention to maintain higher interest rates.

This shift in sentiment could be linked to recent robust economic data from the United States (US). Additionally, Federal Reserve Governor Christopher Waller's cautionary remarks, indicating no urgency to begin rate cuts, have tempered market expectations of three rate cuts in 2024.

US Gross Domestic Product (GDP) Annualized expanded by 3.4% in Q4, surpassing market expectations of remaining unchanged at a 3.2% increase. US Core Personal Consumption Expenditures (QoQ) for the same period came in at 2.0%, slightly below the expected and previous reading of 2.1%.

The Canadian Dollar (CAD) received a boost due to increased prospects of foreign currency inflows, fueled by the uptick in West Texas Intermediate (WTI) oil prices. The rise in Crude oil prices is linked to expectations that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) will continue their production cuts.

Canada's Gross Domestic Product (MoM) expanded by 0.6% in January, surpassing the projected 0.4% increase. This indicates economic resilience and suggests a strengthening economic landscape. These figures have instilled confidence in Canada's economic outlook, dampening market expectations of immediate rate cuts by the Bank of Canada (BoC).

USD/CAD

Overview
Today last price 1.354
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 1.354
 
Trends
Daily SMA20 1.3536
Daily SMA50 1.3505
Daily SMA100 1.3497
Daily SMA200 1.3495
 
Levels
Previous Daily High 1.3614
Previous Daily Low 1.3525
Previous Weekly High 1.3614
Previous Weekly Low 1.3456
Previous Monthly High 1.3606
Previous Monthly Low 1.3366
Daily Fibonacci 38.2% 1.3559
Daily Fibonacci 61.8% 1.358
Daily Pivot Point S1 1.3506
Daily Pivot Point S2 1.3471
Daily Pivot Point S3 1.3417
Daily Pivot Point R1 1.3594
Daily Pivot Point R2 1.3649
Daily Pivot Point R3 1.3683

 

 

03:21
WTI advances to near $82.80 on likelihood of OPEC+ maintaining production cuts
  • WTI price gained ground as OPEC+ is expected to maintain their production cuts.
  • Ukrainian attacks on Russia's infrastructure are contributing to the sentiment of tightening global Crude supplies.
  • Fuel suppliers in Baltimore are expected to encounter delays following the collapse of the Francis Scott Key Bridge.

West Texas Intermediate (WTI) oil price settled higher at $82.82 per barrel on Thursday. Markets are closed on Good Friday. The rise in Crude oil prices is attributed to the likelihood of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) maintaining their production cuts.

Investors are expected to closely monitor the Joint Monitoring Ministerial Committee meeting of the OPEC next week. Despite increased geopolitical risks, which have raised concerns about potential supply disruptions, it is unlikely that OPEC+ will change their oil output policies until a full ministerial gathering scheduled for June. Furthermore, Crude oil prices are buoyed by the ongoing Ukrainian attacks on Russia's energy infrastructure, contributing to the sentiment of tightening global Crude supplies.

The Energy Information Administration (EIA) report indicated a weekly rise in US crude inventories. For the week ending on March 22, the EIA Crude Oil Stocks Change reported an increase of 3.165 million barrels in stock, contrary to the expected decline of 1.275 million barrels and the previous decline of 1.952 million barrels.

Following the collapse of the Francis Scott Key Bridge on Tuesday, fuel suppliers in Baltimore are expected to encounter trucking delays and other logistical challenges. The collapse resulted in parts of the bridge falling into shipping lanes at the mouth of the Port of Baltimore, leading to the indefinite closure of the city's port.

US Gross Domestic Product (GDP) Annualized expanded by 3.4% in the fourth quarter of 2023, exceeding market expectations which anticipated a 3.2% increase. The US Gross Domestic Product Price Index remained stable with a 1.7% increase, aligning with projections for Q4. Investors further await the latest US Personal Consumption Expenditures (PCE) price index report, the Federal Reserve's preferred inflation measure, scheduled for release on Friday, to gain insights into the trajectory of interest rates.

WTI US OIL

Overview
Today last price 82.82
Today Daily Change 0.00
Today Daily Change % 0.00
Today daily open 82.82
 
Trends
Daily SMA20 80.03
Daily SMA50 77.8
Daily SMA100 75.72
Daily SMA200 78.63
 
Levels
Previous Daily High 82.9
Previous Daily Low 81.27
Previous Weekly High 83.05
Previous Weekly Low 80.24
Previous Monthly High 79.27
Previous Monthly Low 71.46
Daily Fibonacci 38.2% 82.28
Daily Fibonacci 61.8% 81.89
Daily Pivot Point S1 81.76
Daily Pivot Point S2 80.7
Daily Pivot Point S3 80.13
Daily Pivot Point R1 83.39
Daily Pivot Point R2 83.96
Daily Pivot Point R3 85.02

 

 

02:52
Gold Price Forecast: XAU/USD flirts with record highs above $2,230, all eyes on US PCE data
  • Gold price hovers around $2,230, nearly record highs in Friday’s Asian session. 
  • The prospect of interest rate cuts from the US Fed and the ongoing geopolitical tensions lift the yellow metal.
  • The hawkish Fed comments and robust US economy data might cap the gold’s upside. 
  • Investors will closely monitor the US February PCE data, due on Friday.  

Gold price (XAU/USD) flirts with record highs around $2,230 during the Asian session on Friday. The uptick of yellow metal is bolstered by the safe-haven flows amidst growing economic concerns and the prospect of interest rate cuts from the US Federal Reserve (Fed). However, the easing expectations for the Fed rate cuts might lift the US Dollar (USD) and cap the upside of USD-denominated gold. 

Gold gains momentum as investors anticipate three rate cuts from the US Federal Reserve (Fed) this year. The Fed held its benchmark overnight borrowing rate in a range between 5.25%-5.50% for the fifth consecutive time last week. Furthermore, the central bank still expects three quarter-percentage point cuts by the end of the year. According to the CME FedWatch Tool, traders are currently pricing in nearly 63% odds that the Fed will cut interest rates in June. It’s worth noting that lower interest rates generally weaken the USD, making gold cheaper to investors holding other currencies.

Furthermore, the ongoing geopolitical risk in the Middle East might boost traditional safe-haven assets like gold. The Palestinian Red Crescent said that Israeli forces besieged two more Gaza hospitals on Sunday, pinning down medical teams under heavy gunfire.

On the other hand, a combination of hawkish Fed comments and robust US economy data might weigh on the gold price. Many Fed officials remain cautious about easing too soon. On Wednesday, Fed Governor Christopher Waller said that there was “no rush” to Fed bank President Raphael Bostic stated that he now sees just one quarter-point rate cut this year, down from the two cuts that he had previously estimated. 

Most markets are closed for Good Friday, but the US February Personal Consumption Expenditures Price Index (PCE) data will take center stage on Friday. The Core PCE, Fed's preferred inflation gauge, is projected to show an increase of 0.3% in February.

XAU/USD

Overview
Today last price 2234.24
Today Daily Change 0.00
Today Daily Change % 0.00
Today daily open 2234.24
 
Trends
Daily SMA20 2163.93
Daily SMA50 2080.93
Daily SMA100 2051.64
Daily SMA200 1989.35
 
Levels
Previous Daily High 2236.27
Previous Daily Low 2187.44
Previous Weekly High 2223.22
Previous Weekly Low 2146.16
Previous Monthly High 2065.49
Previous Monthly Low 1984.26
Daily Fibonacci 38.2% 2217.62
Daily Fibonacci 61.8% 2206.09
Daily Pivot Point S1 2202.36
Daily Pivot Point S2 2170.49
Daily Pivot Point S3 2153.53
Daily Pivot Point R1 2251.19
Daily Pivot Point R2 2268.15
Daily Pivot Point R3 2300.02

 

 

02:30
Commodities. Daily history for Thursday, March 28, 2024
Raw materials Closed Change, %
Silver 24.981 1.81
Gold 2232.596 1.86
Palladium 1014.65 3.4
02:12
China’s SAFE: Will steadily promote financial market opening

Speaking at the annual Boao Forum on Friday, Xu Zhibin, the deputy head of the State Administration of Foreign Exchange (SAFE), said that he “will steadily promote financial market opening.”

Additional comments

Will improve policies to facilitate cross-border investment.

Will further enhance capital account opening.

Will enhance risk prevention capabilities.

Market reaction

Despite the encouraging comments from China’s FX regulator, AUD/USD remains uninspired near 0.6515, modestly flat on the day.

02:11
EUR/USD extends losses on dovish remarks from ECB members, trades near 1.0780 EURUSD
  • EUR/USD depreciates on hawkish sentiment surrounding the US Fed.
  • Fed’s Waller hinted at a delay in interest rate cuts due to stronger inflation figures.
  • ECB’s Villeroy suggested that the ECB's inflation goal of 2% is attainable.

EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar (USD) influenced by the hawkish market sentiment surrounding the Federal Reserve (Fed) and expectations of prolonged higher interest rates. This shift in sentiment is supported by recent strong economic indicators from the United States (US). The EUR/USD pair edges lower to near 1.0780 during the Asian trading hours on Friday.

The US Dollar Index (DXY) strengthens, nearing 104.60, driven by hawkish statements from a Federal Reserve (Fed) official, which boosted the Greenback. Fed Governor Christopher Waller's comments on Wednesday hinted at a potential delay in interest rate cuts, given the strong inflation figures. Investors now await the US Personal Consumption Expenditures (PCE) report on Friday, which serves as the Fed’s preferred inflation gauge, to gain additional insight and guidance.

In the fourth quarter of 2023, the US Gross Domestic Product (GDP) Annualized expanded by 3.4%, surpassing market expectations of remaining unchanged at a 3.2% increase. The US Gross Domestic Product Price Index remained steady with a 1.7% increase, in line with expectations for Q4.

US Core Personal Consumption Expenditures (QoQ) for the same period came in at 2.0%, slightly below both the expected and previous reading of 2.1%. Additionally, US Initial Jobless Claims decreased to 210,000 in the week ending March 22, contrary to expectations for an increase to 215,000 from the previous 212,000.

The Euro encounters difficulties following dovish remarks from European Central Bank (ECB) policymaker Francois Villeroy. Villeroy noted a rapid decline in core inflation, albeit it remains high. He suggested that the ECB's inflation goal of 2% is attainable, but warned of increasing downside risks if the ECB refrains from cutting rates.

Furthermore, ECB executive board member Fabio Panetta stated on Thursday that "the conditions to start easing monetary policy are materializing." He highlighted that restrictive policies are suppressing demand and leading to a swift drop in inflation. Panetta also indicated that risks to price stability have lessened.

EUR/USD

Overview
Today last price 1.0776
Today Daily Change -0.0013
Today Daily Change % -0.12
Today daily open 1.0789
 
Trends
Daily SMA20 1.0876
Daily SMA50 1.0837
Daily SMA100 1.0875
Daily SMA200 1.0836
 
Levels
Previous Daily High 1.0828
Previous Daily Low 1.0775
Previous Weekly High 1.0942
Previous Weekly Low 1.0802
Previous Monthly High 1.0898
Previous Monthly Low 1.0695
Daily Fibonacci 38.2% 1.0795
Daily Fibonacci 61.8% 1.0808
Daily Pivot Point S1 1.0767
Daily Pivot Point S2 1.0745
Daily Pivot Point S3 1.0714
Daily Pivot Point R1 1.082
Daily Pivot Point R2 1.0851
Daily Pivot Point R3 1.0873

 

 

01:54
NZD/USD remains under selling pressure below 0.6000, US PCE data looms NZDUSD
  • NZD/USD edges lower to 0.5970 amid stronger USD and dovish comments from RBNZ. 
  • The US economy grew faster than expected in the fourth quarter (Q4). 
  • RBNZ’s Orr said the central bank is on course to get inflation back into the target band, rate cuts are getting closer.
  • The US February Core PCE will be in the spotlight on Friday. 

The NZD/USD pair remains under some selling pressure near 0.5970 after retracing from the 0.6000 barrier during the Asian session on Friday. The dovish comments from the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr weigh on the New Zealand Dollar (NZD). Investors await the release of US February Personal Consumption Expenditures (PCE) data on Friday for fresh catalysts. 

The US economy expanded faster than expected in the fourth quarter (Q4), owing to robust consumer spending and corporate investment, according to the third estimate released by the Bureau of Economic Analysis on Thursday. The final US Gross Domestic Product (GDP) for Q4 grew at an annual rate of 3.4% from the previous 3.2% estimate. The US Dollar (USD) edges higher following the stronger-than-expected data. 

On the Kiwi front, the RBNZ Governor Orr said the central bank is on track to getting inflation back into the target band while adding that interest rates have peaked and cuts are getting closer. The RBNZ indicated that it may cut rates from early next year. However, investors have priced in cuts from August this year. This, in turn, drags the NZD lower and acts as a headwind for the NZD/USD pair. 

The US Core PCE data will be released later on Friday, which is estimated to show an increase of 0.3% MoM and 0.8% YoY in February. If the report showed firmer readings, this could boost the USD. The Fed’s Chair Jerome Powell and Fed Bank of San Francisco President Mary Daly are set to speak later on Friday. 

GBP/USD

Overview
Today last price 1.2624
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 1.2624
 
Trends
Daily SMA20 1.2719
Daily SMA50 1.2678
Daily SMA100 1.2653
Daily SMA200 1.259
 
Levels
Previous Daily High 1.2655
Previous Daily Low 1.2586
Previous Weekly High 1.2804
Previous Weekly Low 1.2575
Previous Monthly High 1.2773
Previous Monthly Low 1.2518
Daily Fibonacci 38.2% 1.2612
Daily Fibonacci 61.8% 1.2629
Daily Pivot Point S1 1.2588
Daily Pivot Point S2 1.2553
Daily Pivot Point S3 1.252
Daily Pivot Point R1 1.2657
Daily Pivot Point R2 1.269
Daily Pivot Point R3 1.2726

 

 

01:37
Australian Dollar depreciates on risk aversion amid a stronger US Dollar
  • Australian Dollar remains tepid as market bias leans towards RBA adopting a dovish stance.
  • Australia's central bank may consider cutting interest rates in the second half of 2024.
  • US Dollar strengthens as recent data suggests that the Fed may delay implementing rate cuts shortly.

The Australian Dollar (AUD) extends its losses for the second successive session on Friday. However, market activity is expected to be subdued due to light trading on Good Friday. Meanwhile, the US Dollar (USD) strengthens as recent data indicates annualized economic expansion in the United States (US), driven by consumer spending. This development undermines the AUD/USD pair.

The Australian Dollar encountered difficulties amid weaker Consumer Inflation Expectations and Retail Sales figures from Australia. These indicators raised expectations of potential interest rate cuts by the Reserve Bank of Australia (RBA) in the latter half of 2024. Furthermore, Wednesday's release of the softer Australian Monthly Consumer Price Index further reinforced this outlook.

The US Dollar Index (DXY) seems poised to extend its winning streak, buoyed by hawkish comments from a Federal Reserve (Fed) official that bolstered the Greenback. Fed Governor Christopher Waller's remarks on Wednesday suggested that the central bank might delay interest rate cuts in light of robust inflation data. Investors now await the US Personal Consumption Expenditures (PCE) report on Friday, which serves as the Fed’s preferred inflation gauge, to gain additional insight and guidance.

Daily Digest Market Movers: Australian Dollar depreciates as RBA may adopt a dovish stance

  • Australia's Consumer Inflation Expectations came in at 4.3% in March, a slight decrease from the previous increase of 4.5%.
  • The seasonally adjusted Aussie Retail Sales showed a month-over-month increase of 0.3% in February, falling short of the expected 0.4% and the prior 1.1%.
  • Australia's Monthly Consumer Price Index (YoY) for February saw a 3.4% rise, maintaining consistency with previous levels but slightly below the anticipated 3.5%.
  • Australia's government has pledged to support a minimum wage increase aligned with inflation this year, recognizing the ongoing challenges low-income families face amid rising living costs.
  • At the Boao Forum for Asia (BFA), China's top legislator, Zhao Leji, emphasized China's stance on inclusive economic globalization. He stated that China opposes unilateralism and protectionism in all their forms and is committed to closely linking its development with other countries.
  • Federal Reserve Board Governor Christopher Waller still sees 'no rush' to cut rates amid sticky inflation data.
  • Atlanta Fed President Raphael Bostic expressed his expectation for just one rate cut this year, cautioning that reducing rates prematurely could lead to greater disruption.
  • US Gross Domestic Product Annualized expanded by 3.4% in the fourth quarter of 2023. The market expectation was to be unchanged at a 3.2% increase.
  • The US Gross Domestic Product Price Index remained consistent at a 1.7% increase, as expected in Q4.
  • Core Personal Consumption Expenditures (QoQ) came in at 2.0% in the fourth quarter, slightly below the expected and previous reading of 2.1%.
  • US Initial Jobless Claims fell to 210K in the week ending on March 22, against the expected increase to 215K from 212K prior.

Technical Analysis: Australian Dollar hovers above psychological support at the 0.6500 level

The Australian Dollar trades near 0.6510 on Friday. Immediate resistance is noted around the 23.6% Fibonacci retracement level at 0.6528, followed by the 21-day Exponential Moving Average (EMA) at 0.6547, and the significant barrier of 0.6550. On the downside, a notable support level is located at the psychological mark of 0.6500, followed by March’s low at 0.6477. A breach below this level could potentially lead the AUD/USD pair to test the major support level at 0.6450.

AUD/USD: Daily Chart

Australian Dollar price today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Pound Sterling.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   0.11% 0.00% 0.01% 0.05% -0.01% 0.05% 0.06%
EUR -0.10%   -0.11% -0.08% -0.06% -0.12% -0.06% -0.04%
GBP 0.00% 0.12%   0.02% 0.04% -0.01% 0.05% 0.07%
CAD -0.01% 0.06% -0.03%   0.04% -0.03% 0.02% 0.03%
AUD -0.06% 0.02% -0.08% -0.03%   -0.05% 0.01% 0.02%
JPY 0.02% 0.11% 0.00% 0.03% 0.11%   0.09% 0.13%
NZD -0.05% 0.05% -0.04% -0.01% -0.02% -0.05%   0.04%
CHF -0.06% 0.03% 0.00% 0.01% -0.01% -0.10% -0.04%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

 

Australian Dollar FAQs

One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate, and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe havens (risk-off) – is also a factor, with risk-on positive for AUD.

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods, and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought-after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

 

01:20
PBoC sets USD/CNY reference rate at 7.0950 vs. 7.0948 previous

On Friday, the People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead at  7.0950 as compared to the previous day's fix of 7.0948 and 7.2259 Reuters estimates.

 

00:55
Japan’s Suzuki: Rapid FX moves are undesirable, speculative moves seen

Japanese Finance Minister Shunichi Suzuki offered some verbal intervention on Friday. Suzuki said it’s important for currencies to move in a stable manner reflecting fundamentals and he will closely watch foreign exchange moves with a high sense of urgency. 

Key quotes

“Important for currencies to move in a stable manner, reflecting fundamentals.”

“Rapid FX moves are undesirable.”

“Speculative move seen behind forex moves.”

“Closely watching FX moves with a high sense of urgency.”

“Won't rule out any steps to respond to disorderly FX moves.”

“Watching speed of forex moves, not level.”

Market reaction

At the time of writing, USD/JPY is trading 0.01% lower on the day at 151.36.

 

Bank of Japan FAQs

The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.

The Bank of Japan has embarked in an ultra-loose monetary policy since 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds.

The Bank’s massive stimulus has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy of holding down rates has led to a widening differential with other currencies, dragging down the value of the Yen.

A weaker Yen and the spike in global energy prices have led to an increase in Japanese inflation, which has exceeded the BoJ’s 2% target. Still, the Bank judges that the sustainable and stable achievement of the 2% target has not yet come in sight, so any sudden change in the current policy looks unlikely.

 

00:47
USD/JPY holds positive ground around 151.50 following Japanese CPI data USDJPY
  • USD/JPY trades on a stronger note around the mid-151.00s on Friday. 
  • Japan’s Kishida said it was appropriate for the BoJ to maintain easy monetary policy. 
  • Fed’s Waller stated there is no rush to cut rate and need to maintain it for longer than expected

The USD/JPY pair holds positive ground for the second consecutive day near 151.45 on Friday during the early Asian trading hours. The cautious approach from the Bank of Japan (BoJ) to keep monetary conditions accommodative exerts some selling pressure on the Japanese Yen (JPY). Additionally, the hawkish comments from the Federal Reserve (Fed) officials provide some support to the US Dollar (USD) and USD/JPY

Data released from the Statistics Bureau of Japan reported that the headline Tokyo Consumer Price Index (CPI) for March climbed 2.6% YoY following a 2.6% rise in February. Meanwhile, the Tokyo CPI ex Fresh Food, Energy climbed 2.9% YoY, down from a 3.1% rise in February. However, the JPY remains on the defensive following the Japanese inflation data and the dovish comments from the Japanese authorities. 

On Thursday, Japanese Prime Minister Fumio Kishida said that it was appropriate for the central bank to “maintain accommodative monetary conditions.” Kishida further stated that the government will continue to work closely with the BoJ to ensure wages continue to rise and the economy exits from deflation. 

Nonetheless, the potential intervention from the Japanese authorities might cap the weakening of the JPY. Japan finance minister Shunichi Suzuki came in some verbal intervention on Friday, saying that he will closely watch the foreign exchange moves with a high sense of urgency and will not rule out any actions to respond to disorderly the FX moves.

On the USD’s front, stronger US economic data and the high-for-longer rate narrative from the Fed lift the Greenback against its rivals. The Fed Governor Christopher Waller, the most outspoken policy hawk, said on Thursday that the central bank is in no rush to cut the benchmark rate and may need to “maintain the current rate target for longer than expected.” Waller added that they need to see more inflation progress before supporting rate cuts.

Next week, Japan’s Tankan Large Manufacturing Index for the first quarter (Q1), along with the US ISM Purchasing Managers Index (PMI) report, will be due. The US Nonfarm Payrolls (NFP) for March on April 5 will be a closely watched event. 

USD/JPY

Overview
Today last price 151.47
Today Daily Change 0.09
Today Daily Change % 0.06
Today daily open 151.38
 
Trends
Daily SMA20 149.74
Daily SMA50 149.34
Daily SMA100 147.6
Daily SMA200 146.84
 
Levels
Previous Daily High 151.54
Previous Daily Low 151.15
Previous Weekly High 151.86
Previous Weekly Low 148.91
Previous Monthly High 150.89
Previous Monthly Low 145.9
Daily Fibonacci 38.2% 151.39
Daily Fibonacci 61.8% 151.3
Daily Pivot Point S1 151.17
Daily Pivot Point S2 150.96
Daily Pivot Point S3 150.78
Daily Pivot Point R1 151.57
Daily Pivot Point R2 151.75
Daily Pivot Point R3 151.96

 





 

00:30
Stocks. Daily history for Thursday, March 28, 2024
Index Change, points Closed Change, %
NIKKEI 225 -594.66 40168.07 -1.46
Hang Seng 148.58 16541.42 0.91
KOSPI -9.29 2745.82 -0.34
ASX 200 77.3 7896.9 0.99
DAX 15.4 18492.49 0.08
CAC 40 1 8205.81 0.01
Dow Jones 47.29 39807.37 0.12
S&P 500 5.86 5254.35 0.11
NASDAQ Composite -20.06 16379.46 -0.12
00:15
Currencies. Daily history for Thursday, March 28, 2024
Pare Closed Change, %
AUDUSD 0.6514 -0.17
EURJPY 163.277 -0.21
EURUSD 1.07889 -0.27
GBPJPY 191.004 0.03
GBPUSD 1.262 -0.04
NZDUSD 0.59719 -0.37
USDCAD 1.35377 -0.3
USDCHF 0.9017 -0.33
USDJPY 151.379 0.05

FOREIGN EXCHANGE MARKET NEWS

CURRENCY MARKET DEFINITION
The concept of currency market has several definitions:

  • Currency market is the sphere of economic relations that are manifested in the purchase and sale of currency values (foreign currency, securities in foreign currency), as well as operations related to the investment of capital in foreign currency;
  • Currency market is a financial center where currency purchase and sale transactions based on supply and demand for them are concentrated;
  • Curency market is a whole of authorized banks, investment companies, brokerages, exchanges, and foreign banks that perform foreign exchange operations.
  • Currency market is a whole of communications systems that link banks in different countries that conduct international currency transactions.

Simply put, currency market is the market where currency transactions are made, that is, the currency of one country is exchanged for the currency of another country at a certain exchange rate. The exchange rate is the relative price of currencies of two countries or the currency of one country expressed in another country's monetary units.

Currency market is part of the global financial market, where many operations related to the global movement of capital take place.

TYPES OF MARKETS. RUSSIAN AND INTERNATIONAL CURRENCY MARKETS
There are international and domestic currency markets.

Domestic currency market — is a market within a single country.

The international currency market — is a global market that covers currency markets of all countries in the world. It does not have a specific site where trading is carried out. All operations within it are carried out through a system of cable and satellite channels that link the world's regional currency markets. Regional markets today include the Asian (with centers in Tokyo, Hong Kong, Singapore, and Melbourne), the European (London, Frankfurt am Main, and Zurich), and the American (New York, Chicago, and Los Angeles) markets.

Currency trading on the international currency market is carried out on the basis of market exchange rates, which are set on the basis of supply and demand in the market and under the influence of various macroeconomic data. Forex is the international currency market.

Currency markets can also be divided into exchange and over-the-counter markets. Exchange currency market is an organized market where trading is carried out through an exchange—a special company that sets trading rules and provides all the conditions for organizing trading under these rules.

Over-the-counter currency market — is a market where there are no certain trading rules, and purchase and sale operations are not linked to a specific place of trade, as opposed to the case of an exchange.

As a rule, an over-the-counter currency market is organized by special companies that provide services for the purchase and sale of currencies, which may or may not be members of the currency exchange. Trading operations in this market are now carried out mainly via the Internet.

The over-the-counter currency market is much larger than the exchange market in terms of trading volume. The Forex international over-the-counter currency market is considered the most liquid in the world. It operates around the clock in all financial centers of the world (from New York to Tokyo).

CURRENCY MARKET FUNCTIONS
Currency market— is the most important platform for ensuring the normal course of all global economic processes.

The main macroeconomic functions of the currency market are:

  • creating conditions for the subjects of foreign exchange relations to make timely international current and capital payments and thereby promoting the development of foreign trade;
  • providing conditions and mechanisms for the implementation of monetary and economic policy of the state;
  • diversifying foreign exchange reserves;
  • forming the exchange rate under the influence of supply and demand;

NEWS IMPACT
Various currencies are the main trading tool in the currency market. Exchange rates are formed under the influence of supply and demand in the market.

In addition to that, currency rates are influenced by many fundamental factors related to the global economic situation, events in national economies, and political decisions.

News about these factors can be found in various sources:

  • Reports showing a country´s level of economic development.

The more stable an economy is developing, the more stable its currency is. Accordingly, it is possible to predict how the currency will behave in the near future, based on statistical data published in official sources of countries with a certain regularity.
This data includes:

  • GDP
  • unemployment;
  • return on equity;
  • consumer price index;
  • industrial price index;
  • propensity to consume;
  • salaries outside of the agricultural sector;
  • residential construction, etc.

Interest rate level, set by national authorities regulating credit policy, is an equally important indicator. In the European Union, this is ECB–the European Central Bank, in the US, this is the Federal Reserve System, in Japan—the Bank of Japan, in the UK—the Bank of England, in Switzerland—the Swiss national Bank, etc.

The interest rate level is determined at meetings of the national central bank. Then, the decision on the rate is published in official sources. If the central bank of a country reduces the interest rate, the money supply in the country increases, and the national currency depreciates against other world currencies. If the interest rate increases, the national currency will strengthen.

  • Speeches of country leaders, leading economists and analysts.

A speech or even a separate statement by a country's leader can reverse a trend. Speeches on these topics may change the currency exchange rate:

  • analysis of the situation on the currency market;
  • changes in monetary or economic policy;
  • adoption of a budget policy;
  • forecasts of the economic situation, etc.

All this news is published in various sources. Major international news is more or less easy to find in Russian, but news related to the domestic economic policy and the economy of foreign countries is much less common in the Russian press. Mostly, such news is published by the national media and in the language of the country where the news is published.

It is very difficult for one person to follow all the news at once, and they are likely to miss some important event that can turn the whole situation on the market upside down. Guided by our main principle—to create the best trading conditions for our customers—we try to select the most important news from all over the world and publish them on our website.

The TeleTRADE Department of Analytics monitors news on most national and international news sources on a daily basis and identifies those that can potentially affect exchange rates. These are the main news items that are included in our news feed.

In addition, all our clients have free access to the Dow Jones news feed. This is a joint project of Dow Jones Newswires, the world's largest news agency, and the leading Russian news agency Prime-TASS. The news feed is created specifically for currency traders and those who are interested in getting information about the world's currency markets.

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