Market consolidation takes place early Monday as traders pare the previous day’s moves in favor of the US Dollar and the haven assets. That said, the US Dollar extends pullback from a one-week high amid cautious mood ahead of this week’s top-tier data about employment, Retail Sales and inflation from the UK, as well as from the US. It’s worth noting that optimism remains absent from the trading floors amid mixed updates about China and the market’s fears about the Israel war.
As a result, commodities and Antipodeans consolidate the previous week’s losses while the Treasury bond yields stay firmer and favor the USDJPY amid mixed signals.
EURUSD, USDCAD and USDCHF lack clear directions while the GBPUSD edges higher after the Bank of England (BoE) officials tried to push back dovish bias about the British central bank. Also, likely weakness in the UK data allows the Pound to prepare for the statistics before a fresh fall.
Gold Price flirts with the 200-SMA while crude oil extends the previous day’s pullback from a four-month low. Elsewhere, Wall Street closed with mild gains but the US stock futures printed mild losses while shares in the Asia-Pacific zone edged lower.
Cryptocurrencies remain dicey after refreshing the multi-month high last week as optimism about the spot ETF fades.
Following are the latest moves of the key assets:
The risk appetite improved a bit, especially after Friday’s downbeat readings of the University of Michigan’s (UoM) Consumer Sentiment Index for November weighed on the US Dollar Index (DXY). However, Fed Chair Jerome Powell’s hawkish remarks that showed readiness for further rate hikes in case needed, as well as pushing back of the rate cut chatters, favored the Greenback buyers and kept the GBPUSD bears hopeful.
That said, economic fears surrounding China escalated last week after the headline inflation softened and the People’s Bank of China (PBoC) showed eagerness to avoid softening growth. Also, the mixed messages about the US-China ties add strength to the market’s fears about the Dragon nation’s future growth and a likely dent in the commodity demand due to Beijing’s status as one of the world’s top industrial players.
Even so, the economic fears surrounding other Western countries outside the US also drove investors toward the US Dollar, which in turn exerts downside pressure on the GBPUSD price. It’s worth noting that a slew of officials from the Bank of England (BoE) crossed wires last week and tried to push back the calls for a policy pivot, as well as the economic pessimism surrounding the respective nation. However, the latest fundamentals have been against the commentaries and hence the Pound sellers remain hopeful.
Earlier in the day, RBA officials tried to defend their hawkish bias after last week’s rate hike failed to impress the AUDUSD bulls, which in turn joined the risk-on mood to propel the Aussie prices. However, a light calendar and anxiety ahead of this week’s inflation data from the US and the UK, as well as other top-tier data and Fed/BoE talks, offer less entertainment to the traders.
A lack of major data/events could allow the US Dollar bulls to take a breather and extend the week-start consolidation of the market moves. However, a few central bankers are scheduled for public speeches and may renew the hawkish Fed bias and propel the US Dollar. Above all, this week’s US inflation data will be the key to watch for clear directions.
May the trading luck be with you!