USD Drifts as Consolidation Extends – Scotiabank

FXStreet Insights Team FXStreet

The USD continues to drift as it consolidates last week’s advance, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

USD continues to consolidate

“Gains for the JPY and EUR on the session are pressuring the DXY somewhat but the drop in the dollar index still looks more like a pause ahead of renewed gains rather than a reversal. High beta FX is mostly underperforming amid some lumpy moves in Asian stocks and a sharp drop in crude oil (down 2%). The AUD is the main underperformer on the session as markets ponder the outlook for the Chinese economy.”

“Chinese markets returned from holidays with a bang but were unable to sustain strong opening gains. Investors are disappointed with the scale and scope of stimulus measures offered by the authorities. The mainland CSI 300 stock index gave up nearly half of its opening gains on the day while the Hang Seng fell more than 9%. European stocks are in the red while US equity futures are holding small gains.”

“It’s another pretty light session for data—just the Trade Balance update from the US this morning. There is a bit more Fedspeak today (Bostic, Collins—a non-voter—and Jefferson) and a 3Y auction, with results at 1pm. This evening, the RBNZ is expected to cut its key cash rate 50bps to 4.75%.”

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 shows resilience below 38.2% Fibo. near mid-0.7100s

The AUD/USD pair touches a one-and-a-half-week low, around the 0.7140 region during the Asian session on Monday, though it lacks follow-through. Spot prices currently trade just above mid-0.7100s, down nearly 0.25% for the day.

USD/JPY: Japanese Yen edges lower vs USD amid Middle East jitters as Fed, BoJ meetings loom

The USD/JPY pair attracts some buyers at the start of a new week and climbs closer to the 154.00 mark during the Asian session, reversing a part of Friday's losses. Spot prices, however, remain confined in a range held over the past week or so and within striking distance of a nearly seven-month low, touched last Tuesday, as traders await this week's key central bank events.

Gold: Fed’s rate decision to drive the next move

Gold reflects a subdued performance at the start of the Federal Reserve’s (Fed) monetary policy week at around $4,330. Fed’s interest rate expectations heavily influenced last week after the release of the hot United States (US) Producer Price Index (PPI) and Consumer Price Index (CPI) reports for August.

Pi Network extends gains as ecosystem development supports recovery

Pi Network (PI) extends its recovery on Monday, trading above $0.097 after two consecutive weeks of gains. Continued ecosystem development and improved developer tools are boosting utility. Meanwhile, the technical indicators point to a tentative recovery, but overhead Exponential Moving Averages remain a challenge and cap PI gains.

US Dollar Weekly Forecast: The last line of defense

There was no respite to the downward trend for the US Dollar this week, which added to the prior week’s retracement and at some point flirted with the area of four-month lows. Indeed, after trading at levels just shy of its psychological 100.00 barrier early in the month, the US Dollar Index has come all the way down to challenge the 98.50 zone, extending its negative streak for the third month in a row.

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.