Dollar Holds Strong as Treasury Yields Rise and Fed Cut Bets Diminish
The dollar index stabilized around 102.4 on Tuesday, hovering near its highest levels since mid-August as investors adjusted their expectations for Federal Reserve interest rate cuts following a robust September jobs report. Markets now estimate an 87% likelihood that the Fed will implement a modest 25 basis point rate reduction in November, while completely dismissing the possibility of a larger half-percentage point cut, as indicated by CME’s FedWatch Tool. The dollar also benefited from rising US Treasury yields, with the benchmark 10-year bond yields surpassing 4% for the first time since early August. Investors are now looking forward to releasing the latest Fed meeting minutes on Wednesday and the consumer price index report on Thursday for further guidance on interest rates. Additionally, increasing tensions in the Middle East have continued to elevate safe-haven demand for the dollar.
In the EUR/USD pair, the initial resistance will be at 1.1000 followed by 1.1050 and 1.1100 if this level is surpassed. On the downside, the first support is at 1.0950, with subsequent supports at 1.0900 and 1.0850 below.
Gold Falls for Fifth Session as Markets Focus on US Inflation Data and Fed
Gold prices fell below $2,640 per ounce on Tuesday, marking a decline for the fifth straight session. This drop was influenced by a stronger jobs report, which diminished hopes for more aggressive interest rate cuts from the Federal Reserve. Currently, markets are anticipating an 86% chance that the Fed will opt for a modest 25 basis point rate cut in November. Lower interest rates typically make holding non-interest-bearing assets like gold more attractive. Traders are also focused on key Consumer Price Index (CPI) and Producer Price Index (PPI) data set to be released this week, as well as the minutes from the Federal Open Market Committee (FOMC) and comments from various Fed officials for additional insights. Additionally, gold’s status as a safe-haven asset is being reinforced by rising tensions in the Middle East. On a related note, China’s central bank has not added to its gold reserves for the fifth month in a row as of September.
In gold, the first support is at 2630, with subsequent levels at 2600 and 2550 below that. Above, the initial resistance is at 2685, followed by 2700 and 2730 if this level is surpassed.
Dollar Holds Gains as Markets Await Fed Insights and US Inflation Data
The dollar index remained strong near 102.5 as investors focused on the release of the Federal Reserve’s meeting minutes and the upcoming Consumer Price Index (CPI) report for further guidance on U.S. interest rate policy.
Last week’s robust U.S. jobs report reduced expectations for a large rate cut, with markets now pricing in an 85% chance of a 25 basis point reduction in November. In other markets, the yen stabilized at 147.7 ahead of the Fed’s minutes, and gold retreated to $2,620 per ounce amid strong labor data. The British pound and silver also held steady as traders awaited U.S. data releases to determine future market direction. The geopolitical tensions in the Middle East continue to support safe-haven demand for the dollar and gold, albeit gold’s gains have been capped by solid U.S. economic data.
USD/JPY Traders Eye FOMC Minutes for Clues on US Monetary Policy
On Wednesday, the Japanese yen began trading at around 148.50. Given the absence of significant economic data from Japan for the day, it is anticipated that the primary drivers influencing the currency pair will come from the United States. In particular, the release of the FOMC meeting minutes is expected to play a crucial role in shaping market movements for the yen. Investors will closely monitor these minutes for insights into the Federal Reserve’s monetary policy direction, as any hints regarding future interest rate adjustments could significantly impact the yen’s valuation against the dollar. With market participants on edge regarding potential shifts in U.S. economic policy, the FOMC minutes will likely provide clarity on the Fed’s stance amid ongoing economic developments.
In USD/JPY, the first support is at 147.30, with subsequent levels at 145.20 and 144.00 below that. On the upside, the initial resistance is at 149.30, followed by 150.00 and 151.00 if this level is breached.
GBP/USD Focuses on US FOMC Minutes Amid Lack of UK Data
On Wednesday, the British pound started trading at approximately 1.3084. With no significant economic data scheduled for release from the UK throughout the day, it is expected that the primary influences on the currency pair will originate from the United States. In particular, the minutes from the recent FOMC meeting are likely to have a substantial impact on market dynamics for the pound.
In GBP/USD, the first support is at 1.3080, with subsequent levels at 1.3050 and 1.3000 below that. On the upside, the initial resistance is at 1.3145, followed by 1.3200 and 1.3250 if this level is surpassed.
Dollar Holds Near Highs Due to US CPI Data and Fed Outlook
The dollar index remained strong around 102.9 as markets awaited the release of US Consumer Price Index (CPI) data, which could influence the Federal Reserve’s rate decision in November.
While a 25 basis point rate cut is expected, recent strong US jobs data has tempered expectations for more aggressive cuts. The Japanese yen fell below 149 per dollar, pressured by weaker domestic data and a stronger dollar. Meanwhile, gold rebounded above $2,610 per ounce, recovering from a six-day decline ahead of the US inflation report, with ongoing geopolitical tensions supporting its safe-haven appeal. The GBP/USD pair focused on upcoming US economic data, with potential volatility anticipated from inflation and unemployment reports. Silver prices also looked to US data for direction, as traders weighed its safe-haven status amid market uncertainties.
Dollar Index Holds Near Two-Month High as Markets Await US CPI Data
On Thursday, the dollar index remained around 102.9, maintaining its highest levels in nearly two months as investors braced for the September Consumer Price Index report, which could impact the Federal Reserve’s interest rate decision in November. The minutes from the Fed’s September meeting indicated a division among policymakers regarding the pace of rate cuts, ultimately opting for a significant 50 basis point reduction to balance inflation targets with concerns over the labor market. Following last week’s strong US jobs report, traders have tempered their expectations for aggressive rate cuts from the Fed. Currently, the markets estimate an 83% chance that the Fed will implement a more modest 25 basis point cut in November, effectively dismissing the possibility of another half-percentage point reduction. While the dollar maintained gains against most major currencies, it experienced a slight pullback against the New Zealand dollar, likely reflecting a technical correction.
In the EUR/USD pair, the initial resistance will be at 1.0950 followed by 1.1000 and 1.1050 if this level is surpassed. On the downside, the first support is at 1.0900, with subsequent supports at 1.0850 and 1.0800 below that.
Gold Rises Above $2,610 Ahead of Key US Inflation Data
On Thursday, gold climbed above $2,610 per ounce after experiencing six consecutive days of decline. This uptick comes as investors await key US Consumer Price Index (CPI) data later in the day, which could provide further insights into the Federal Reserve’s interest rate outlook. Recently, gold prices had dipped to their lowest point in nearly three weeks, largely due to fading expectations for more aggressive policy moves from the Fed. Minutes from the latest FOMC meeting indicated a split among policymakers regarding potential rate cuts. Some members favored a more substantial half-point reduction, while others preferred a modest quarter-point cut, emphasizing the need for confirmation of a sustained decline in inflation and showing reduced concern about the labor market. This perspective aligns with last week’s jobs report, which highlighted resilience in employment figures. Currently, the market is pricing in an 83% probability of a 25 basis point cut in November. Despite these developments, gold continues to attract investors as a safe-haven asset, particularly in light of ongoing geopolitical tensions in the Middle East.
In gold, the first support is at 2600, with subsequent levels at 2550 and 2500 below that. Above, the initial resistance is at 2635, followed by 2660 and 2685 if this level is surpassed.
Markets Eye US Inflation and Fed Signals, Pressuring Gold, Yen, and Pound
The dollar index remained strong near 102.9 on Friday, set for a second consecutive weekly gain as US inflation data and Federal Reserve signals dampened hopes for significant rate cuts.
While consumer inflation slowed less than expected in September, initial jobless claims surged, fueling mixed expectations for future Fed policy moves. The Japanese yen remained weak, hovering around 148.7 per dollar, pressured by the dollar’s strength and cautious Fed outlook. Meanwhile, gold climbed above $2,640 per ounce, gaining amid market uncertainty over US inflation data, though it remains poised for a weekly decline. The pound faced pressure around 1.3050 following US inflation data, with traders now awaiting UK GDP figures. Silver rose to $31.20 as markets await key US producer inflation data, which could provide further insights into economic trends.
Gold Rises Above $2,640 as Traders Assess Fed Policy Amid Mixed US Data
On Friday, gold climbed above $2,640 per ounce, building on gains from the previous session as traders continued to evaluate the Federal Reserve’s policy direction amid mixed economic data. US headline inflation for September decelerated less than anticipated, while core inflation increased more than expected, interrupting recent progress in easing price pressures. This development has strengthened the perception that the Fed will implement rate cuts at a slower pace than previously believed, as suggested by the latest FOMC minutes released on Wednesday. In addition, a rise in jobless claims has raised questions about the resilience of the US labor market under restrictive interest rates. Currently, there is an 86% chance of a 25 basis point cut in the federal funds rate in November. Investors are also awaiting producer inflation data later today for further insights into price trends. Despite Friday’s uptick, gold is on track to record its second consecutive weekly decline.
In gold, the first support is at 2600, with subsequent levels at 2550 and 2500 below that. Above, the initial resistance is at 2645, followed by 2660 and 2685 if this level is surpassed.
GBP/USD Under Pressure as Dollar Strengthens After US Inflation Data
The pound is trading around 1.3050 this morning. Following the release of US inflation data yesterday, the dollar index strengthened, resulting in a weakening of all dollar-denominated assets. Today, the UK will release its GDP figures, which are expected to introduce significant volatility in the pound, especially amid expectations for interest rate cuts in November and December.
In GBP/USD, the first support is at 1.3045, with subsequent levels at 1.3000 and 1.2950 below that. On the upside, the initial resistance is at 1.3100, followed by 1.3145 and 1.3200 if this level is surpassed.
Geopolitical Tensions and Fed Outlook Boost Safe-Haven Demand
The EUR/USD declined to 1.0920 as geopolitical tensions in the Middle East and China-Taiwan conflicts weigh on risk sentiment, boosting demand for the US dollar.
Expectations of a 25 basis point rate cut by the Federal Reserve in November increased to 87% after the US PPI data. Meanwhile, the euro faces pressure from a dovish ECB outlook. USD/JPY is approaching August lows due to a stronger dollar, while gold holds steady around $2,655, supported by safe-haven demand. GBP/USD dropped to 1.3060 amid safe-haven flows and dovish BoE signals, and silver rallied to $31.30, benefiting from geopolitical risks and expectations of slower Fed rate cuts.
EUR/USD Declines as US PPI Data and ECB Dovish Outlook Weigh on Euro
The EUR/USD pair continued its decline, nearing 1.0920 during the early Asian session on Monday. Risk aversion stemming from rising geopolitical tensions in the Middle East and conflicts between China and Taiwan has put selling pressure on riskier currencies like the euro. On Monday, a spokesperson for the US Department of State expressed serious concerns over the People’s Liberation Army’s military exercises in the Taiwan Strait and around Taiwan, stating they would closely monitor the situation and collaborate with allies on shared concerns. Any signs of escalating tensions could drive safe-haven flows toward the dollar, putting additional pressure on the EUR/USD pair. Traders are anticipating a 25 basis point rate cut from the Federal Reserve in November, following Friday’s US Producer Price Index (PPI) data. According to the CME FedWatch Tool, the probability of this rate cut has risen to approximately 87%, up from 83% before the PPI report. Meanwhile, the euro is facing challenges as the European Central Bank (ECB) is expected to lower interest rates further in its remaining monetary policy meetings this year. The ECB’s dovish outlook has been reinforced by a quick decline in inflationary pressures within the Eurozone and a ‘fragile’ economic recovery.
In the pair, the first support level is at 1.0900. If this level is breached, the next supports to watch will be 1.0870 and 1.0830. On the upside, the first resistance is at 1.0950; if this level is surpassed, the next targets will be 1.1020 and 1.1060.
Gold Holds Steady at $2,655 as Markets Assess Fed Rate Outlook
On Monday, gold remained steady at around $2,655 per ounce after a 1% increase in the previous session. Markets are still evaluating the Federal Reserve’s interest rate outlook considering recent inflation data. Reports revealed that US producer prices remained unchanged in September, alongside a rise in jobless claims, which raises questions about the resilience of the US labor market to higher interest rates. Although headline inflation decreased less than expected, core inflation rose more than anticipated. Currently, the likelihood of a 25 basis point cut to the fed funds rate in November is at 87%. Investors are also awaiting further economic data, such as retail sales figures and comments from several Fed officials, for more insights. Additionally, ongoing geopolitical tensions in the Middle East are enhancing gold’s appeal as a safe haven.
Technically the first support level is at 2,645. If this level is breached, the next supports to watch will be 2,625 and 2,600. On the upside, the initial resistance is at 2,665; if this level is surpassed, the next targets will be 2,685 and 2,700.
The ECB is expected to announce a third interest rate cut on Thursday due to concerns about sluggish economic growth and falling inflation.
A strong US dollar is contributing to the downward pressure on the EUR/USD pair. A decline in the yuan and dovish comments from the Bank of Japan Governor and new Prime Minister further weakened the yen. Gold prices stabilized on Tuesday, supported by increasing tensions between China and Taiwan and ongoing violence in the Middle East. The British pound strengthened against the US dollar after the UK’s unemployment rate fell to 4.0% in August, beating market expectations. Silver prices have fallen due to concerns about demand, particularly in China.
The EUR/USD pair continued its downward trend on Tuesday, slipping for the second day to around 1.0890, nearing its lowest level since August 8, reached the previous day. The European Central Bank (ECB) is set to announce its policy decision on Thursday, with expectations of a third interest rate cut in this easing cycle due to growing concerns about sluggish economic growth. Additionally, inflation in the Eurozone has fallen below the ECB’s 2% target for the first time since 2021, reinforcing the case for further easing measures. This backdrop and a strong US dollar are significantly pressuring the EUR/USD pair.
In the pair, the first support level is at 1.0875. If this level is breached, the next supports to watch will be 1.0830 and 1.0800. On the upside, the first resistance is at 1.0900; if this level is surpassed, the next targets will be 1.0920 and 1.0950.
GBP/USD traded at 1.3050 in response to the latest employment data. The UK’s ILO Unemployment Rate declined to 4.0% for the three months ending in August, down from 4.1% in July, according to data released by the Office for National Statistics (ONS). This figure was better than the market expectation of 4.1%. The positive employment data may take on greater significance following tomorrow’s CPI release, particularly in relation to potential interest rate cuts.
For GBP/USD, the initial support lies at 1.3000, followed by 1.2960 and 1.2925 below. On the upside, the first resistance is at 1.3100, with subsequent levels at 1.3160 and 1.3200 if the pair breaks above this resistance.
Markets Shift Focus to Central Bank Decisions Amid Tensions
The EUR/USD ended its four-day losing streak, stabilizing around 1.0890 as traders await key decisions from the ECB and upcoming Eurozone inflation data.
In USD/JPY, the yen continues to struggle near 149 as the dollar rallies on solid US data, while the BOJ signals caution in future rate hikes. Gold remains steady at $2,665 per ounce, with investors focused on the Fed’s next moves and rising geopolitical tensions, particularly in the Middle East. Meanwhile, GBP/USD has dropped to 1.3010 following disappointing UK CPI data, increasing expectations for a Bank of England rate cut. Silver (XAG/USD) continues to gain, supported by safe-haven demand and rising Middle East tensions.
EUR/USD Ends Losing Streak, Focus Shifts to ECB and HICP Data
EUR/USD stabilized around 1.0890 during the Asian session on Wednesday, ending a four-day losing streak. The euro may face downward pressure as the European Central Bank (ECB) is widely expected to cut both the Main Refinancing Operations and the Deposit Facility Rate by 25 basis points in Thursday’s policy meeting. Traders are closely monitoring the Harmonized Index of Consumer Prices (HICP) data from the Eurozone, set to be released on Thursday, ahead of the ECB’s decision. Additionally, the ECB’s Monetary Policy Statement and President Christine Lagarde’s remarks during the post-meeting press conference will be crucial, as they could offer insights into the bank’s future monetary policy direction.
In the EUR/USD pair, the first support level is at 1.0875. If this level is breached, the next supports to watch will be 1.0830 and 1.0800. On the upside, the first resistance is at 1.0900; if this level is surpassed, the next targets will be 1.0920 and 1.0950.
Gold Holds Steady at $2,665 as Investors Eye Fed’s Next Move
Gold was trading around $2,665 per ounce on Wednesday, maintaining gains from the previous session as investors sought more signals to evaluate the Federal Reserve’s monetary policy direction. The precious metal gained traction on Tuesday after the U.S. dollar and Treasury yields dipped slightly in response to disappointing manufacturing data. The NY Empire State Manufacturing Index unexpectedly fell in October to its lowest level in five months, indicating a contraction in business activity in New York after previously showing growth in September. Investors are now focused on U.S. retail sales data set to be released on Thursday and a speech by Fed Governor Waller on Friday for further insights. Currently, markets are pricing in nearly a 98% probability of a 25 basis point rate cut in the fed funds rate in November. Additionally, heightened tensions in the Middle East may support upward momentum for gold.
Technically, the first support level is at 2,640. If this level is breached, the next supports to watch will be 2,630 and 2,605. On the upside, the initial resistance is at 2,675; if this level is surpassed, the next targets will be 2,685 and 2,700.
