EUR: Lower energy costs lift euro’s terms of trade to yearly high – ING

FXStreet Insights Team FXStreet

European natural gas prices have fallen below EUR 30/MWh for the first time since May, boosting Europe’s terms of trade and offering relief to its struggling manufacturing sector, ING's FX analyst Chris Turner notes.

EUR/USD still stuck near 1.1500 despite supportive fundamentals

"Headlines this morning show European natural gas dropping below EUR30/mwh for the first time since May 2024 This will be very welcome news for the European manufacturing industry. This comes at a time when the manufacturing sector continues to weigh on the broader composite business PMIs in the region, and as Germany considers energy subsidies. The fall in energy prices has led to the euro's terms of trade index rising to its highest level of the year – a clearly positive development for the euro."

"We are a little surprised to see EUR/USD still languishing not far from 1.1500 – but perhaps investors are more comfortable expressing euro-positive views through EUR/CHF than EUR/USD. Still, we think events this week could firm up the floor in EUR/USD at 1.1500. If there are any further positive developments on the Ukraine peace plan, EUR/CHF could easily correct up to 0.9400/9450 in thinning year-end markets."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold bounces-off weekly lows near $4,300 as focus shifts to US CPI

Gold rebounds from its lowest level in over a week, near $4,310, in the Asian session on Friday as rising Fed rate-hike bets, bolstered by US PPI, underpin the US Dollar. Traders now look to the US CPI report for more cues about the Fed's policy path amid inflation risks stemming from higher energy prices due to the Middle East conflict. The outlook will drive the USD and influence the non-yielding bullion.

Ethereum holds above $2,400 as PPI data strengthens rate hike expectations

Ethereum (ETH) is down 0.7% on Thursday as the second-largest cryptocurrency looks to recover from earlier pressure following the release of stronger US inflation data. The Producer Price Index (PPI) for final demand rose 0.4% in August, matching market expectations after a revised 0.1% increase in July, according to the US Labor Department.

Dollar comeback case 'a decent one' – September Fed hike 'back in play'

The dollar was left nursing heavy losses against most of its major peers after last month’s Treasury buyback wobble. Notwithstanding this, we think that the case for a near-term bounce in the greenback is a decent one. Warsh's hawkish pivot at Jackson Hole, followed by what was a blowout US payrolls report for August, has put a September rate hike from the Fed back in play.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.