The Aussie’s relentless run higher seen over the past near two weeks has been brought to an abrupt halt by the latest batch of weak data from China. The trade data showed imports slumping by 20% in YoY terms, after a 14% decline in the previous month. Although impacted by the recent fall in commodity prices, the data reflect the view that domestic demand is also weakening. As for the Aussie, it’s not a surprise to see the recent rally running out of steam, with a high seen at 0.7382, from having been below the 0.70 level towards the end of last month. In the bigger picture, the reasons to be bearish on the Aussie are diminishing, especially in light of the deprecation seen in recent years.
Elsewhere, the single currency continues to perform well relative to others and also the dollar, stopping just shy of the 1.14 level yesterday. The average true range (1 month, simple) for EURUSD is at the low for the March to October period, just above 1 big figure. This is a reflection of the removal of near-term Fed hike expectations, which has reduced the dollar’s sensitivity to data. For today, the focus is on inflation data in the UK at 08:30 GMT, with headline inflation seen going nowhere at 0.0% YoY and PPI data also seen at the same time. Sterling has also managed to hold its ground recently, cable having reversed the push towards the 1.50 level. It’s worth keeping an eye on the core inflation rate on the CPI data, which is expected to nudge higher to 1.0% to 1.1%. This is what the Bank are leaning on with regards to their forward optimism on prices. The only other focus will be the ZEW data at 09:00 GMT in Germany as a reflection of confidence in the overall economy.
FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.
Recommended Content
Editors’ Picks
GBP/USD rises to near 1.2540, driven by higher UK GDP
GBP/USD edged higher to near 1.2540 during Asian hours on Friday, buoyed by the release of higher-than-expected UK Gross Domestic Product (GDP) data for the first quarter.
EUR/USD: The crucial resistance level will emerge at the 1.0790–1.0800 region
The EUR/USD pair trades on a softer note near 1.0775 during the early European hours on Friday. The downtick of the major pair is supported by the renewed US Dollar demand amid hawkish comments from Federal Reserve officials.
Gold price attracts some buyers despite hawkish Fedspeak
Gold price edges higher for the second consecutive day on Friday. Weak employment data bolstered the speculation that the weakening economy would force the Fed to cut rates.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Rate cut optimism fuelled by higher US jobless claims
With Federal Reserve policy acting as the primary driver of investor sentiment in 2024, renewed optimism surrounding the possibility of rate cuts has propelled the Dow to its most significant rally since December.