FX Today: Fed speakers should keep investors entertained

Pablo Piovano FXStreet

The US Dollar (USD) extended its decline to fresh monthly lows as investors reacted to weaker-than-expected ADP employment data, which reignited speculation that the Federal Reserve could deliver additional easing. Meanwhile, optimism over a potential deal to end the US government shutdown continued to build.

Here’s what to watch on Wednesday, November 12:

The selling pressure gathered renewed steam on Tuesday, sending the US Dollar Index (DXY) to new monthly lows near 99.30 despite a slight uptick in US Treasury yields and amid further bets of a rate reduction by the Fed by year-end. The usual weekly MBA Mortgage Applications are due ahead of the API’s weekly report on US crude oil inventories. In addition, the Fed’s Barr, Williams, Paulson, Waller, Bostic and Miran are all due to speak.

EUR/USD advanced to multi-day highs, briefly surpassing the key 1.1600 barrier amid the continuation of the ongoing recovery. The final Inflation Rate in Germany will be the salient event on the domestic calendar alongside speeches by the ECB’s Schnabel and De Guindos.

GBP/USD clocked marginal gains, although enough to maintain its upside momentum well in place for yet another day, this time revisiting the 1.3180 zone. The BoE’s Pill is due to speak in an otherwise empty docket across the Channel.

USD/JPY kept its choppy performance well and sound in the upper end of its recent range near the 154.00 region. Machine Tool Orders and the Reuters Tankan Index are next in Japan.

AUD/USD struggled to extend Monday’s strong rebound further north of the 0.6540 region. Next on tap Down Under will be the release of Home Loans figures and Investment Lending for Homes.

Prices of WTI flirted with six-day highs near the $61.00 mark per barrel as traders evaluated ongoing oversupply concerns and risks of further sanctions on Russian crude oil.

Gold clinched its third consecutive daily advance on Tuesday, coming closer to the $4,150 mark per troy ounce following rising speculation of Fed rate cuts and the downward bias in the US Dollar. Silver prices extended its recovery for the fifth day in a row, this time surpassing the $51.00 mark per ounce, or three-week tops.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

GBP/USD turns negative; slips back to 1.3530

GBP/USD comes under pressure and weakens toward the 1.3530 zone on Tuesday. Cable thus leaves behind two daily upticks in a row and retreats further from Monday’s multi-week tops past 1.3570 following humble gains in the Greenback and disheartening UK jobs data.

EUR/USD back to square one near 1.1580

EUR/USD trims its earlier gains and retests the 1.1580 region in the latter part of the NA session on Tuesday. Indeed, the pair falls into the generalised consolidative theme prevailing in the FX space amid marginal gains in the US Dollar, steady uncertainty in the geopolitical landscape and diminishing bets for further Fed rate hikes.

Gold remains offered around $4,350

Gold accelerates its daily correction and revisits the $4,350 zone per troy ounce on Tuesday. The precious metal sets aside two daily advances in a row and follows the absence of direction in the US Dollar, declining US Treasury yields across the curve and continuous uncertainty in the Middle East crisis.

Crypto Today: Bitcoin, Ethereum, XRP falter amid escalating US-Iran tensions

Cryptocurrency prices are broadly correcting on Tuesday, with Bitcoin edging lower toward $64,000. Ethereum shows weakness amid ongoing narrow-range consolidation, while Ripple trades below $1.00, weighed down by falling technical indicators.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.