Market wrap: US dollar and US rates helped by data - Westpac

Ross J Burland FXStreet

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: The US dollar and US interest rates rose in the approach to this week’s Fed meeting, helped also by stronger economic data.

Interest rates: US 10yr treasury yields initially dipped to 2.40% but reversed around the time of the consumer confidence and wholesale trade data to 2.48%. 2yr yields rose from 1.11% to 1.14%. Fed funds futures continued to imply a 100% chance of a rate hike on 14 December, and two more rate hikes priced in for 2017.

Currencies: The US dollar index gained around 0.5%, futures speculators increasing their long-USD positions further. EUR fell from 1.0630 to 1.0531, perhaps also hurt by news Italy’s third largest bank was refused a bailout extension from the ECB. The safe-haven yen underperformed, USD/JPY rising from 114.50 to 115.33 – a 10-month high. AUD fell from a London midday peak of 0.7496 to 0.7436, closing at 0.7456. NZD fell from 0.7188 to 0.7126. AUD/NZD rose from 1.0380 to 1.0450."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD advances to three-week high above 1.3400 as UK political risk eases

The GBP/USD pair builds on Wednesday's gains and trades in positive territory above 1.3400 during the early European trading hours on Thursday. Fading political uncertainty following the resignation of Keir Starmer in late June provides some support to the British Pound against the US Dollar. However, the risk-averse market atmosphere could limit the pair's upside.

EUR/USD climbs toward 1.1450 despite Mideast tensions

EUR/USD gains traction in the European session on Thursday and advances toward 1.1450. Despite the escalating tensions in the Middle East, the US Dollar (USD) struggles to find demand and allows the pair to stretch higher. Weekly Jobless Claims data will be featured in the US economic calendar.

Gold rebounds to $4,100 but struggles to gather momentum

Gold manages to stage a rebound and clings to modest daily gains near $4,100 following a three-day slide. With Middle East hostilities reviving fears of high global inflation, which could cause major central banks to refrain from easing monetary conditions, XAU/USD finds it difficult to gather momentum.

Hyperliquid: Short-term noise in HYPE price masks breakout potential to $100

Hyperliquid continues to slide for the fourth consecutive day this week as retail demand eases amid broader market risk-off sentiment. A surge in HIP-3 Open Interest reflects steady demand for tokenized Real World Assets, amid institutional inflows that support the broader upward trend.

2.50%: Why the Kiwi's first hike in three years is a wager on a number nobody can see

The Reserve Bank of New Zealand (RBNZ) raised the Official Cash Rate (OCR) by 25 basis points to 2.50% at 02:00 GMT on Wednesday, its first hike in three years and the moment the bank that cut deeper than any G10 peer last cycle turned to face the other way.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance.