Posted at 20 November 2023 / Categories Market Roundups
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EUR/USD: The euro steadied against dollar on as the dollar extended its slide on expectations that the Federal Reserve was done raising interest rates. Last week's data reignited hopes that the Fed could begin easing monetary conditions sooner than expected after a slowing jobs market report in the U.S. and a weaker-than-expected consumer inflation report. The minutes of the Federal Reserve's last meeting, due during U.S. trading hours on Tuesday, will provide insights to investors on how well placed current expectations on interest rates are. The euro was up 0.15% at $1.0924 .Immediate resistance can be seen at 1.0958(23.6%fib), an upside break can trigger rise towards 1.1000( (Psychological level).On the downside, immediate support is seen at 1.0885 (5DMA), a break below could take the pair towards 1.0869(38.2%fib).
GBP/USD: The pound strengthened against dollar on Monday as investors awaited updates on the government's fiscal policy later this week. Investor attention turned towards Britain's budget deficit readings for October on Tuesday, followed by the UK's Autumn Statement on Wednesday that would provide insights on the government's budget plans. Britain’s next government will almost certainly need to raise taxes and make unwelcome spending choices even if this week's budget update from finance minister Jeremy Hunt presents a superficially brighter picture. Immediate resistance can be seen at 1.2522(23.6%fib), an upside break can trigger rise towards 1.2544 (Sep11th high).On the downside, immediate support is seen at 1.2448 (5DMA), a break below could take the pair towards 1.2425(38.2%fib).
USD/CAD: The Canadian dollar was little changed against its broadly weaker U.S. counterpart on Monday, as speculators added to their short positions in the currency ahead of domestic inflation data that could keep the Bank of Canada on the sidelines. Tuesday’s data is expected to show that Canadian inflation slowed to an annual pace of 3.2% in October from 3.8% in September. The loonie was trading almost unchanged at 1.3720 per greenback, after trading in a range of 1.3690 to 1.3749.It was the only G10 currency not to gain against the US dollar as investors believed the US Federal Reserve had ended its interest rate hike cycle. Immediate resistance can be seen at 1.3735(30DMA), an upside break can trigger rise towards 1.3763(38.2%fib).On the downside, immediate support is seen at 1.3694(50%fib), a break below could take the pair towards 1.3641(61.8%fib).
USD/JPY: The dollar declined against the yen on Monday extending a downtrend from last week as traders reaffirmed their belief that U.S. rates have peaked and turned their attention to when the Federal Reserve could begin cutting rates. Markets have priced out any additional Fed rate hikes, as recent data has shown a slowing of the economy and inflation pressures - but not enough to increase fears a sharp recession is looming.On Monday, the Conference Board's October leading economic indicator showed a decline of 0.8%, slightly below the estimate calling for a 0.7% decrease and its 19th straight monthly fall.The economic calendar is relatively light due to the shortened work week in the U.S. with the Thanksgiving Day holiday on Thursday. The dollar last down 0.83% at 148.39 yen .Strong resistance can be seen at 149.00(38.2%fib),an upside break can trigger rise towards 150.06(23.6%fib).On the downside, immediate support is seen 148.78 (50%fib)a break below could take the pair towards 147.20 (61.8%fib).
European shares were subdued on Monday after a strong week driven by aggressive bets on interest rate cuts, with drugs-to-pesticides group Bayer sliding to a more than 14-year low and weighing on the healthcare sector and Germany's benchmark index.
The UK's benchmark FTSE 100 closed down by 0.11 percent, Germany's Dax ended down by 0.11 percent, and France’s CAC finished the day up by 0.11 percent.
Wall Street's three major stock averages closed higher on Monday with Nasdaq's 1% rally leading the charge as heavyweight Microsoft hit a record high after it hired prominent artificial intelligence executives.
Dow Jones was closed up by 0.58 percent, S&P 500 closed up by 0.74 percent, Nasdaq closed up by 1.13 percent.
Treasury yields headed lower after solid bidding in the $16-billion sale of 20-year Treasury bonds on Monday suggested the market still anticipates inflation will decelerate and that the Federal Reserve will cut interest rates around June next year.
The Treasury sold 20-year bonds at a high yield of 4.780%, or lower than the roughly 4.810% yield the market was trading at in the half hour prior to the auction.
Oil prices climbed more than 2% on Monday as further supply cuts in OPEC+ production are expected to be announced following a meeting of member countries early next week.
Brent crude futures settled up $1.71, or 2.1%, at $82.32 a barrel.The front-month December West Texas Intermediate crude (WTI) expired at $77.60, up $1.71, or 2.3%. The more active January futures gained $2.39 to $77.83, up 1.8%.
Gold prices edged lower on Monday, with a weaker dollar putting a floor under prices as investors awaited minutes of the Federal Reserve's last meeting for cues on the central bank's interest rate path.
Spot gold was down 0.1% at $1,977.49 per ounce by 3:33 p.m. ET (2033 GMT), after rising to as high as $1,993.29 on Friday. U.S. gold futures settled 0.2% down at $1,980.30.