EUR/USD
EUR/USD extends its winning streak for the fourth consecutive session, testing 1.1800 in the European session on Tuesday. The persistent US Dollar weakness on bets of aggressive Fed rate cuts remains the underlying factor for the pair’s strength. The focus now shifts to German ZEW and US Retail Sales data.
GBP/USD
GBP/USD sits at its highest level since early July above 1.3600 in the European session on Tuesday. The data from the UK showed that the ILO Unemployment Rate held steady at 4.7% in the three months to July, as expected. Later in the day, key data releases from the US will be watched closely by investors.
USD/JPY
The Japanese Yen (JPY) spikes to a one-week high and remains on track to appreciate further against a broadly weaker US Dollar (USD) amid the divergent Bank of Japan (BoJ)-Federal Reserve (Fed) policy expectations. Investors seem convinced that the BoJ will stick to its policy normalization path, while the US central bank will resume its rate-cutting cycle this week. This, in turn, is seen as a key factor driving flows towards the lower-yielding JPY and exerting downward pressure on the USD/JPY pair.
AUD/USD
The Australian Dollar (AUD) declines against the US Dollar (USD) on Tuesday after registering gains in the previous session. The AUD/USD pair appreciated as the US Dollar (USD) struggled ahead of the looming US Federal Reserve (Fed) policy meeting due on Wednesday.
NZD/USD
The NZD/USD pair trades in a tight range around 0.5970 during the late Asian trading session on Tuesday. Investors brace for significant volatility in the Kiwi pair as the Federal Reserve’s (Fed) monetary policy announcement and New Zealand’s (NZ) Q2 Gross Domestic Product (GDP) data are scheduled for Wednesday and Thursday, respectively.
USD/CAD
USD/CAD continues to lose ground after registering nearly 0.5% losses in the previous session, trading around 1.3770 during the Asian hours on Tuesday. The pair depreciates as the commodity-linked Canadian Dollar (CAD) could have received support from the improved Oil prices. WTI price received support after a potential supply disruption from Russia following Ukrainian drone attacks on its energy infrastructure and mounting US pressure on buyers of Russian crude.
USD/CHF
The latest figures confirmed a persistent disinflationary trend. The Producer and Import Price Index fell 0.6% MoM in August, sharply missing expectations for a 0.1% rise and following a -0.2% decline in July. On an annual basis, prices dropped -1.8%, a steeper fall than July’s -0.9%. The weak data highlight that cost pressures in Switzerland are fading, keeping headline inflation well below the SNB’s 0-2% target band.
CRUDE OIL
The pace at which oil and gas fields lose output is accelerating worldwide, driven by heavier reliance on shale and deepwater resources, the International Energy Agency (IEA) said on Tuesday. As a result, producers must ramp up investment simply to keep global supply from falling.
Gold remains within striking distance of the all-time peak near $3,700 in Tuesday’s European trading. Rising Fed rate cut bets continue to undermine the US Dollar and benefit the non-yielding commodity. Extremely overbought conditions fail to cap the upside ahead of this week’s key Fed policy announcements.
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