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19.09.2023 Market Report


EUR/USD is trading on the defensive below 1.0550 in early Europe on Thursday. Simmering Middle East geopolitical tensions underpin the safe-haven US Dollar. Investors also trade with cautious ahead of Fed Chair Powell’s speech. 


The GBP/USD pair struggles to gain any meaningful traction on Thursday and oscillates in a narrow band, below mid-1.2100s during the Asian session. Spot prices flirt with the lower end of a one-week-old trading range, awaiting a fresh catalyst before the next leg of a directional move.


The USD/JPY pair attracts some sellers during the Asian session on Thursday and for now, seems to have snapped a three-day winning streak back closer to the 150.00 psychological mark. Spot prices currently trade around the 149.75 region, down just over 0.10% for the day, though the downside seems cushioned in the wake of the underlying bullish sentiment surrounding the US Dollar (USD).


The AUD/USD saw an early climb into a daily high of 0.6393 following hawkish, infaltion-fighting comments from Reserve Bank of Australia (RBA) Governor Michelle Bullock early Wednesday, but the bidding momentum would prove to be short-lived as broader market sentiment took a turn for the bearish, sending the AUD/USD back into 0.6330 as investors shake out of risk assets.


The NZD/USD pair remains under heavy selling pressure for the third successive day – also marking the sixth day of a negative move in the previous seven – and dives to its lowest level since early November 2022 during the Asian session on Thursday. Spot prices currently trade around the 0.5825 region, down over 0.40% for the day, and seem vulnerable to prolonging the recent declining trend from the 0.6055 area, or the monthly peak touched last week.


USD/CAD extends the winning streak on the third successive day, trading higher near 1.3720 during the Asian session on Thursday. Despite the better-than-expected Canada housing data, the pair receives upward support due to the risk-on sentiment.

Canada Mortgage and Housing Corporation released Housing Starts s.a (YoY) for September, increasing to 270.5K against the market expectations of 240.0K and the previous 250.4K. Moreover, the Loonie Dollar (CAD) is on a downward slide, dancing hand in hand with declining Crude Oil prices.


The USD/CHF pair posts modest gains below the 0.9000 psychological mark during the Asian session on Thursday. The recovery of the pair is supported by a rise in US Treasury yields and a firmer US Dollar (USD). Meanwhile, the US Dollar Index (DXY) surges to 106.63. US Treasury yields edge higher, with the 10-year Treasury yield climbing to 4.965%, the highest level since 2007, and the 2-year Treasury yield staying at 5.251%.


Oil prices fell in Asian trade on Thursday after a strong run of gains this week as markets awaited more developments in the Israel-Hamas war, while upcoming signals from the Federal Reserve were also in focus. 


Gold price gained strong positive traction on Wednesday and shot to its highest level since early August, around the $1,962-1,963 area in the wake of the risk of an escalation in the Middle East conflict. Hawkish Fed expectations, rising US bond yields and stronger USD cap gains.

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