Markets portray a perfect U-turn of the early-day risk-aversion despite looming concerns over Poland and China. The underlying optimism seems to take clues from the hopes of easy rate hikes as traders await the US Retail Sales data for October.
EURUSD leads the bulls amid hawkish ECB concerns and the recently firmer Eurozone data while the GBPUSD fails to cheer UK’s strong inflation numbers. USDCNY snaps a five-day downtrend amid pessimism surrounding the dragon nation.
Prices of gold and crude oil fail to cheer softer US dollar amid cautious mood and the mixed headlines over rocket fires in Poland.
BTCUSD and ETHUSD struggle to defend the two-day rebound amid fresh fears for the crypto market.
Following are the latest moves of the key assets:
Risk appetite improves after a tepid pullback
An alleged Russian attack on Poland, a NATO country, triggered a risk-off mood late Tuesday as global leaders rushed for emergency meetings and showed readiness to take steps. However, the news that it was a mistaken fire from Ukraine to counter Russian rockets that killed two Polish people tamed the risk aversion afterward. Also challenging the sentiment was the highest levels of Covid numbers from China since April 2021.
On the contrary, hopes of further stimulus from Beijing and ECB policymakers’ optimism, backed by the latest upbeat data, joined softer US PPI to recall the rosy mood and exerted downside pressure on the greenback.
Elsewhere, news of BlockFi’s potential bankruptcy and harsh stand from the US watchdogs keep BTCUSD and ETHUSD on the bear’s radar.
US Retail Sales, ECB President Lagarde will be in the spotlight
Although the recent waves in the market are against the US dollar, the key consumer-centric data, after the inflation, is still left pending for publication and can very well recall the greenback buyers as the Fed policymakers haven’t welcomed doves so far. On the other hand, looming fears of the recession may stop ECB’s Lagarde from being optimistic and can weigh on the EUR. Hence, traders should remain cautious before taking any big positions ahead of the scheduled outcomes.
May the trading luck be with you!