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Denis Sergienko • 2022-09-06

GBPUSD, USDJPY cheers risk-on mood, RBA failed to propel Aussie

GBPUSD, USDJPY cheers risk-on mood, RBA failed to propel Aussie

Stimulus hopes and political optimism appeared to have favored the sentiment on full markets’ return during early Tuesday. The risk-on mood favored USDJPY while the GBPUSD also cheered the British politicians’ readiness to tame the energy bill crisis after weeks of uncertainty over the PM’s status.

US dollar remained pressured despite firmer yields but did mark marginal gains when compared to the AUDUSD pair. The reason could be linked to the RBA’s dovish hike.

Prices of gold and crude oil also portrayed gains even as OPEC+ output cut appeared shallow.

Elsewhere, optimism surrounding Ethereum’s Merge and softer USD joined the overall better risk profile to favor BTCUSD and ETHUSD buyers.

Following are the latest moves of the key assets:

  • Brent oil rises for the third consecutive day, up 0.45% on a day near $97.00 by the press time.
  • Gold reverses the previous day’s losses at around $1,715, up 0.30% at the latest.
  • USD Index extends pullback from 20-year high towards 109.00, down 0.15% intraday to 109.45 at the latest.
  • FTSE rises 1.5% but DAX and Eurostoxx are both down over 1.0% as we write.
  • BTCUSD adds half a percent to poke $20,000 while ETHUSD rises to the fresh high in over a week as bulls attack $1,670.
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Bracing for key data/events?

Incoming British PM Liz Truss readies plans for multi-billion dollars worth of stimulus to tame energy bill crisis at home, People’s Bank of China cuts Reserve Ratio Requirements (RRR) while the US policymakers aim for more $50B Investment In Chips. Elsewhere, Europe and Germany also showed readiness to defend the domestic energy firms from short-term gas/oil and higher prices. With this, hopes of more stimulus seemed to have favored the risk appetite.

Even so, recession fears aren’t off and hence the Treasury bond yields remain firmer but can’t fuel the US dollar. The reason could be linked to the anxiety ahead of the US ISM Services PMI, as well as the recent reduction in the hawkish Fed bets.

On a different page, RBA announced its 50 bps rate hike but couldn’t please the AUDUSD buyers as details suggest growing economic fears. Also likely to have exerted downside pressure on the Aussie could be the downbeat forecasts for Australia’s Q2 GDP, up for publishing tomorrow.

It’s worth noting that the OPEC+ production cut joined the risk-on mood to offer mild gains in oil. However, the output reduction seemed lesser than initially feared and joins the recession woes to challenge the energy buyers.

Above all, the full markets appear to cheer Friday’s softer US jobs report and stimulus hopes ahead of the key US ISM Services PMI and ECB monetary policy meeting results.

The risk-on mood favored cryptos and is joined by optimism over Ethereum’s Merge. However, fears of upcoming stringent policies seemed to have tamed the BTCUSD and ETHUSD bulls.

  • Strong buy: USDJPY
  • Strong sell: ETHUSD
  • Buy: USD Index, USDCAD, Nasdaq
  • Sell: DAX, FTSE 100, gold, BTCUSD

US data in focus

US ISM Services PMI for August will be closely analyzed after recently softer US job numbers and the cautious Fed speeches, not to forget receding market bets on the US central bank’s aggressive rate hikes. Should the data continue to portray a firmer economic transition in the US, the US dollar may regain upside momentum, which in turn could weigh on the commodities and Antipodeans. Additionally, talks surrounding Russia versus the West tussles and the US-China tension might also entertain market players.

May the trading luck be with you!