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28.08.2023 Market Report


EUR/USD is trading above 1.0800, rebounding from 13-week lows in early Europe on Monday. The US Dollar pullback lifts the pair amid the return of risk flows while traders digest Friday’s hawkish comments from Fed Chair Powell and ECB President Lagarde. 


GBP/USD is rising above 1.2600, gaining some positive traction on the first day of a new week The pair benefits t from a modest US Dollar retreat, as China’s policy support measures boost risk appetite. Light trading is likely to extend due to the UK Summer Bank holiday. 


The USD/JPY pair consolidates its recent gains below the mid-146.00s during the early Asian session on Monday. The pair trades close to the highest level since November 2022 of 146.62, which was reached on Friday. The divergence in monetary between the Federal Reserve (Fed) and the Bank of Japan (BoJ) boosts the Greenback, but the possibility of BoJ intervention could limit further appreciation.


AUD/USD rises half a percent to around 0.6440 as it prods the key upside hurdle after witnessing upbeat Australia Retail Sales. Adding strength to the Aussie pair’s rebound could be China stimulus and the US Dollar’s retreat ahead of this week’s key inflation and employment data.


The NZD/USD pair continues to show some resilience below the 0.5900 mark and attracts some buying during the Asian session on Monday. Spot prices steadily climb to the 0.5920-0.5925 region and for now, seem to have snapped a two-day losing streak to the lowest level since November 2022 touched on Friday, though any meaningful appreciating move still seems elusive.


USD/CAD retreats from the highest level in three months despite lacking downside momentum around 1.3595-90 during the early Monday morning in Europe. In doing so, the Loonie pair cheers the US Dollar’s pullback while paying a little heed to the softer prices of Canada’s main export item, namely the WTI crude oil, amid a slightly optimistic market ahead of this week’s top-tier data/events from the US and Canada.


The USD/CHF pair retraces from a multi-week high of 0.8876 amid the decline of US Treasury bond yields during the early Asian session on Monday. Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, remains above 104.10, close to a monthly high. At the time of writing, the USD/CHF is trading at 0.8847, up 0.01%.


Oil prices were marginally lower on Monday as investors stayed fretful over the pace of economic growth in China, and the prospect of further U.S. interest rate hikes that could dampen fuel demand.


Gold Price (XAU/USD) remains dicey after pushing back the bearish bias with the first positive weekly close in five. The Yellow Metal’s latest inaction could be linked to the market’s anxiety ahead of this week’s top-tier US inflation and employment clues.

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