Overview
Overnight, the USD led much of the price action in what was otherwise a quiet session, with antipodean currencies coming under sustained selling pressure amid the weakness seen in commodities and concerns over growth in China. Notably, AUD fell to its lowest in 10 days amid continued weakness in iron ore and increasing bets of a rate cut by the RBA, while JPY slumped after Japanese IP fell the most since June 2014, with renewed strength in the greenback following after last week’s lower-than-expected revision to GDP led the way lower.
The strength in the USD weighed on major pairs as EUR/USD fell tantalizingly close to breaching the 1.0800 handle to the downside, then bounced off its lowest levels. Concerns over Greece’s liquidity issues exacerbated the move lower in the pair, as the most recent proposal of reforms submitted to European creditors failed to gather sufficient approval. GBP/USD also came under relatively strong selling pressure amid the USD strength and lingering political concerns in the UK. Notably, most recent polls reaffirm the view that both leading parties will fail to win the required 326 seats for a majority.
Looking ahead, tomorrow sees German Unemployment Change, UK and Canadian GDP, as well as a host of Fed officials, with Fischer, Lacker, Lockhart, Mester and George all due on the speaker slate. Finally, tomorrow’s deadline for the nuclear talks on Iran could provide a firm sense of direction in the energy complex.
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EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.