Dollar weakness guides markets as risk appetite rebuilds

Frank Walbaum

Important News this week.

Dollar weakness guides markets as risk appetite rebuilds

US Dollar weakness remains a key market driver. A softer Greenback is helping risk assets stabilize, while Bitcoin and Ethereum show renewed upside momentum. Most altcoins remain sideways, so crypto sentiment is improving but not yet broadly bullish.
Gold and Silver have added another bullish signal by breaking above their 50-MA on the weekly chart. If the breakout holds, technical buying could push both metals higher. Lower US yields and expectations of less restrictive monetary policy are also weighing on the Dollar.
USDJPY continues lower and could find support after its recent decline. GBPAUD remains at a crossroads: below 1.9070 could open further downside, while a move above 1.9130 would favour renewed upside.

Market talk

The weaker Dollar, stabilizing equities, improving BTC and ETH momentum and the weekly breakout in Gold and Silver are creating a more constructive market backdrop. The key question is whether this develops into a broader risk-on move.

If the Dollar continues lower while metals and crypto extend their gains, risk appetite could strengthen further. A Dollar rebound would quickly challenge this setup. USDJPY and GBPAUD remain important technical indicators for the next FX direction.

Tendencies in the markets

Equities sideways, USD weak, BTC positive, ETH positive, oil sideways, metals strong, JPY strong.

Author

Frank Walbaum

GBP/USD keeps range around 1.3600 amid a pause in USD sell-off

GBP/USD holds its retreat from its highest level since May 11, ranging around the 1.3600 mark in the European session on Thursday. US Dollar sellers take a breather as markets assess whether the US Treasury buyback will be a game-changer. Attention now remains on US data and Middle East headlines for further trading impetus.

EUR/USD consolidates below 1.1700 as USD stabilizes

EUR/USD enters a bullish consolidation phase below 1.1700 in European trading on Thursday after touching its highest level since late May. Bulls now await a move beyond the 1.1700 mark before placing fresh bets, as the US Dollar stabilizes following the US Treasury's bond buyback plan-led slump. US Jobless Claims data are next in focus amid lingering Iran risks.

Gold sticks to losses below $4,500 as USD firms on hawkish FOMC minutes and Iran risks

Gold sticks to modest intraday losses through the Asian session and currently trades below the $4,500 mark, though it remains close to the highest level since early June, set earlier this Thursday. Against the backdrop of geopolitical uncertainties, the US Dollar stabilizes after the previous day’s slump to a three-month low amid hawkish FOMC Minutes. This prompts bulls to take some profits off the table and weighs on the bullion, though retreating US bond yields limit further downside.

Top Altcoins Price Forecast: Ripple rallies above $1, Solana eyes $85, Cardano eases gains

Top altcoins, such as Ripple, Solana, and Cardano, are holding steady on Thursday after a bullish rebound as the broader crypto market rebounds on US Treasury bond buybacks. The technical outlook for XRP and SOL suggests further upside, while ADA risks losing the recent gains. Ripple trades around $1.0951 following a 10% surge the previous day.

The bond coup

Yesterday was marked by a coup from the US Treasury, which suddenly announced that it will ‘at least double’ the maximum size of its buyback operations for longer-term debt, hoping to ease pressure on long-term yields and borrowing costs. Phoah! The markets reacted heavily to the news. The US 10-year yield fell sharply, while the 30-year yield dropped from its highest levels since 2007.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.