Euro steady as PMIs

Kenny Fisher MarketPulse

The euro is trading quietly in the Friday session. Currently, EUR/USD is trading at 1.1636, up 0.10% on the day.

Manufacturing PMIs within expectations

German and eurozone Manufacturing PMIs for October continued to point to strong manufacturing activity. The German Manufacturing PMI came in at 58.2 and the eurozone release at 58.5. Both PMIs showed little movement from September, but were stronger than expected. Business activity slowed in both Germany and the eurozone, although it too remains in expansionary territory, as seen in the Services PMIs.

The PMIs may be in positive territory, but that of course is only part of the economic picture. The eurozone is clearly in a recovery phase, but growth has been affected by product shortages and supply chain disruptions. Businesses have had to deal with higher costs, which eventually make their way to the consumer and have resulted in higher inflation. The ECB has maintained that inflation is temporary, and unlike the Fed and the BoE, is not faced with surging inflation that may require interest rate hikes to wrestle under control.

At the same time, most major central banks are embarking on a tightening cycle, and the ECB may not be able to go it alone with an accommodative policy. If growth weakens and inflation gathers steam, ECB policy makers will have to consider scaling back the bank’s asset purchase programme.

In the US, positive data on Thursday, led by Initial Unemployment Claims, provided the dollar with a boost and also raised speculation about a Fed taper, which is widely expected before the end of the year. The dollar index continues to trade in a range between 93.50 and 94.00 and is at 93.69 in Europe. A drop below 93.50 could see the index fall to the 0.93 line.

EUR/USD technical

EUR/USD is testing resistance at 1.1640. Above, we find resistance at 1.1682.
On the downside, there are support levels at 1.1541 and 1.484.

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.