398574 June 27, 2024 15:02 FXStreet Market News
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398573 June 27, 2024 15:02 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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398571 June 27, 2024 14:56 FXStreet Market News
Here is what you need to know on Thursday, June 27:
The Japanese Yen (JPY) recovers slightly after falling to its weakest level since 1986 against the US Dollar (USD) on Wednesday. The European Commission will release consumer and business sentiment data in the European session. The US economic docket will feature the final revision to the first-quarter Gross Domestic Product growth, weekly Initial Jobless Claims, Durable Goods Orders and Pending Home Sales data for May. Later in the day, market focus will shift to the first US Presidential Debate between Joe Biden and Donald Trump.
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
 | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
---|---|---|---|---|---|---|---|---|
USD | Â | 0.00% | 0.06% | 0.43% | 0.00% | -0.37% | 0.42% | 0.35% |
EUR | 0.00% | Â | 0.07% | 0.48% | 0.05% | -0.34% | 0.47% | 0.43% |
GBP | -0.06% | -0.07% | Â | 0.36% | -0.03% | -0.42% | 0.39% | 0.35% |
JPY | -0.43% | -0.48% | -0.36% | Â | -0.41% | -0.75% | 0.05% | -0.07% |
CAD | -0.00% | -0.05% | 0.03% | 0.41% | Â | -0.36% | 0.42% | 0.38% |
AUD | 0.37% | 0.34% | 0.42% | 0.75% | 0.36% | Â | 0.81% | 0.77% |
NZD | -0.42% | -0.47% | -0.39% | -0.05% | -0.42% | -0.81% | Â | -0.05% |
CHF | -0.35% | -0.43% | -0.35% | 0.07% | -0.38% | -0.77% | 0.05% | Â |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Following the subdued action seen earlier in the week, USD/JPY gathered bullish momentum and climbed to its highest level since 1986 above 160.80 on Wednesday. Verbal intervention from Japanese government officials helped the JPY stage a rebound early Thursday, allowing USD/JPY to retreat back below 160.50. JapanÂ’s Chief Cabinet Secretary Hayashi and Finance Minister Shunichi Suzuki both refrained from commenting on foreign exchange levels but said that they are watching the action in currency markets with a sense of urgency and reiterated that they are prepared to take necessary actions. Meanwhile, the data from Japan showed earlier in the day that Retail Trade grew 3% on a yearly basis in May, surpassing the market expectation and April’s growth of 2%.
The USD Index climbed to its highest level since early May above 106.00 on Wednesday. The index stays in a consolidation phase and fluctuates slightly below this level in the European morning on Thursday. In the meantime, US stock index futures trade in negative territory, while the benchmark 10-year US Treasury bond yield holds steady above 4.3% after rising nearly 2% on Wednesday.
EUR/USD registered losses for the second straight day on Wednesday. Early Thursday, the pair rebounds modestly but remains slightly below 1.0700.
GBP/USD extended its slide amid renewed USD strength and lost 0.5% on Wednesday. The pair edges higher toward 1.2650 to start the European session on Thursday.
Pressured by rising US Treasury bond yields, Gold dropped to its lowest level in over two weeks below $2,300 on Wednesday. XAU/USD stages a correction and trades at around $2,300 in the European morning.
The Japanese Yen (JPY) is one of the worldÂ’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of JapanÂ’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of JapanÂ’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation.
The BoJÂ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supports a widening of the differential between the 10-year US and Japanese bonds, which favors the US Dollar against the Japanese Yen.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the YenÂ’s value against other currencies seen as more risky to invest in.
398566 June 27, 2024 14:40 ICMarkets Market News
Asia-Pacific markets opened lower on Thursday as the Japanese yen weakened to a near 38-year low, hitting 160.82 against the U.S. dollar. Two months ago, the yen breached the 160 level, prompting JapanÂ’s first currency intervention since 2022. Finance Minister Shunichi Suzuki expressed concerns about the economic impact of foreign exchange fluctuations.
JapanÂ’s retail sales growth for May was 3% year-on-year, surpassing the market forecast of 2%. Meanwhile, ChinaÂ’s industrial profits grew 3.4% year-on-year from January to May, reaching 2.75 trillion Chinese yuan ($378.41 million). For the first four months of this year, ChinaÂ’s industrial profits had risen by 4.3%.
In the stock markets, JapanÂ’s Nikkei 225 declined by 1% and the Topix lost 0.5%. Hong KongÂ’s Hang Seng index led regional losses, dropping more than 2%, while Mainland ChinaÂ’s CSI 300 fell 0.41%. South KoreaÂ’s Kospi decreased by 0.48%, and the small-cap Kosdaq was 0.37% lower. AustraliaÂ’s S&P/ASX 200 closed down 0.35%.
In the U.S. overnight, the Dow Jones Industrial Average gained 0.04%, the S&P 500 rose 0.16%, and the Nasdaq Composite increased by 0.49%, led by Amazon shares, which jumped 3.9%. Amazon reached an all-time high and a market value of $2 trillion for the first time, joining the ranks of Nvidia, Apple, Alphabet, and Microsoft.
The post Thursday 27th June 2024: Asian Markets Open Lower Amid Yen Weakness first appeared on IC Markets | Official Blog.
398565 June 27, 2024 14:35 FXStreet Market News
USD/JPY trades around 160.40 during the Asian session on Thursday after retreating from 160.87, the highest level since 1986. This downward correction could be attributed to the verbal intervention by Japanese authorities.
Japanese Finance Minister Shunichi Suzuki stated on Wednesday that he “will take appropriate steps on excessive FX moves.” Suzuki refrained from commenting on specific forex levels or potential interventions but emphasized the importance of currencies moving in a stable manner that reflects fundamentals. Chief Cabinet Secretary Yoshimasa Hayashi echoed similar sentiments as the Finance Minister.
The US Dollar (USD) depreciates possibly due to tradersÂ’ anticipation of FridayÂ’s Core PCE Price Index inflation, projected to decrease year-over-year to 2.6% from the previous 2.8%. This data is seen as the Federal Reserve’s (Fed) preferred inflation gauge. Market participants are hoping that signs of easing inflation will encourage the Federal Reserve (Fed) to consider rate cuts sooner rather than later.
However, the downside of the Greenback could be limited due to higher yields on US Treasury bonds. 2-year and 10-year yields stand at 4.74% and 4.33%, respectively, by the press time.
Reuters cited Fed Governor Michelle Bowman repeating her view on Tuesday that holding the policy rate steady for some time will likely be enough to bring inflation under control. Meanwhile, Fed Governor Lisa Cook said it would be appropriate to cut interest rates “at some point,” given significant progress on inflation and a gradual cooling of the labor market, though she remained vague about the timing of the easing.
The Japanese Yen (JPY) is one of the worldÂ’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of JapanÂ’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of JapanÂ’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation.
The BoJÂ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supports a widening of the differential between the 10-year US and Japanese bonds, which favors the US Dollar against the Japanese Yen.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the YenÂ’s value against other currencies seen as more risky to invest in.
398564 June 27, 2024 14:21 ICMarkets Market News
IC Markets Europe Fundamental Forecast | 27 June 2024
What happened in the Asia session?
The dollar index (DXY) dipped under the 106-level and looks set to slide lower in the latter half of the day while gold found support around $2,395/oz before retracing higher. Crude prices remain range-bound with WTI oil hovering above $80.91 per barrel and could edge higher towards the $82-mark.
What does it mean for the Europe & US sessions?
BoE Governor Andrew Bailey will be holding a press conference on financial stability in London where he could shed more light on the outlook for future monetary policy in the U.K. following last weekÂ’s central bank announcement. Cable dropped to an overnight low of 1.2615 as overhead pressures grew strongly.
The final GDP result for the first quarter of 2024 will be released today and it is expected to show a marginal improvement over the second estimate of 1.3%. Economic output is now anticipated to rise 1.4% QoQ which is still significantly lower than the previous quarterÂ’s print of 3.4%.
Meanwhile, unemployment claims have climbed higher over the past four weeks with each reading coming higher than its respective forecast, highlighting a worryingly increasing trend. Higher-than-expected claims are typically signs of a softening of the U.S. labour market and should claims continue to climb higher once again, it could place the dollar under heavy selling pressures, especially if the final GDP result also misses its estimate.
The Dollar Index (DXY)
Key news events today
GDP (12:30 pm GMT)
Unemployment Claims (12:30 pm GMT)
What can we expect from DXY today?
The final GDP result for the first quarter of 2024 will be released today and it is expected to show a marginal improvement over the second estimate of 1.3%. Economic output is now anticipated to rise 1.4% QoQ which is still significantly lower than the previous quarterÂ’s print of 3.4%.
Meanwhile, unemployment claims have climbed higher over the past four weeks with each reading coming higher than its respective forecast, highlighting a worryingly increasing trend. Higher-than-expected claims are typically signs of a softening of the U.S. labour market and should claims continue to climb higher once again, it could place the dollar under heavy selling pressures, especially if the final GDP result also misses its estimate.
Central Bank Notes:
Next 24 Hours Bias
Weak Bearish
Gold (XAU)
Key news events today
GDP (12:30 pm GMT)
Unemployment Claims (12:30 pm GMT)
What can we expect from Gold today?
The final GDP result for the first quarter of 2024 will be released today and it is expected to show a marginal improvement over the second estimate of 1.3%. Economic output is now anticipated to rise 1.4% QoQ which is still significantly lower than the previous quarterÂ’s print of 3.4%.
Meanwhile, unemployment claims have climbed higher over the past four weeks with each reading coming higher than its respective forecast, highlighting a worryingly increasing trend. Higher-than-expected claims are typically signs of a softening of the U.S. labour market and should claims continue to climb higher once again, it could place the dollar under heavy selling pressures, especially if the final GDP result also misses its estimate – such results could potentially boost gold prices during the U.S. session.
Next 24 Hours Bias
Weak Bearish
The Australian Dollar (AUD)
Key news events today
No major news events.
What can we expect from AUD today?
The Aussie hit an overnight low of 0.6640 and remains under pressure despite the higher-than-anticipated monthly CPI reading which triggered a brief surge during yesterday’s Asia session. This currency pair was trading around 0.6645 as Asian markets came online – these are the support and resistance levels for today.
Support: 0.6630
Resistance: 0.6685
Central Bank Notes:
Next 24 Hours Bias
Weak Bullish
The Kiwi Dollar (NZD)
Key news events today
Matariki (Bank Holiday)
What can we expect from NZD today?
As it is a bank holiday in New Zealand, lower trading activity for the Kiwi can be expected during the Asia session but trading activity could pick up in the latter part of the day. This currency pair was trading around 0.6080 at the beginning of the Asia session – these are the support and resistance levels for today.
Support: 0.6040
Resistance: 0.6150
Central Bank Notes:
Next 24 Hours Bias
Weak Bullish
The Japanese Yen (JPY)
Key news events today
Tokyo Core CPI (11:30 pm GMT)
What can we expect from JPY today?
Core CPI in Tokyo is expected to edge higher from 1.9% to 2.0% YoY in June, which would mark the second consecutive month of higher prices. Although core inflation continues to remain under the BoJ’s target of 2%, a higher-than-anticipated reading for the Tokyo’s core CPI could raise concerns for the BoJ as higher inflationary pressures could force the BoJ to raise interest rates at its next policy meeting – a move that could strengthened the yen.
Central Bank Notes:
Next 24 Hours Bias
Weak Bearish
The Euro (EUR)
Key news events today
No major news events.
What can we expect from EUR today?
Stronger demand for the dollar drove the Euro to an overnight low of 1.0666. This currency pair was trading around 1.0680 as Asian markets came online – these are the support and resistance levels for today.
Support: 1.0680
Resistance: 1.0750
Central Bank Notes:
Next 24 Hours Bias
xxx
The Swiss Franc (CHF)
Key news events today
Weak Bullish
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
Higher demand for the greenback lifted USD/CHF to as high as 0.8983 overnight. This currency pair hovered above 0.8960 at the beginning of the Asia session – these are the support and resistance levels for today.
Support: 0.8835
Resistance: 0.9000
Central Bank Notes:
Next 24 Hours Bias
Weak Bearish
The Pound (GBP)
Key news events today
BoE Gov Bailey Speaks (9:30 am GMT)
What can we expect from GBP today?
BoE Governor Andrew Bailey will be holding a press conference on financial stability in London where he could shed more light on the outlook for future monetary policy in the U.K. following last weekÂ’s central bank announcement. Cable dropped to an overnight low of 1.2615 as overhead pressures grew strongly.
Central Bank Notes:
Next 24 Hours Bias
Weak Bullish
The Canadian Dollar (CAD)
Key news events today
No major news events.
What can we expect from CAD today?
Stronger demand for the greenback lifted USD/CAD to an overnight high of 1.3708. This currency pair was edging higher towards 1.3720 as Asian markets came online – these are the support and resistance levels for today.
Support: 1.3645
Resistance: 1.3725
Central Bank Notes:
Next 24 Hours Bias
Medium Bullish
Oil
Key news events today
No major news events.
What can we expect from Oil today?
Following in the footsteps of the API stockpiles, the EIA crude oil inventories also unexpectedly experienced an inventory build of 3.6M barrels of crude versus the estimate of a 2.6M-drawdown. Despite inventories growing this week – which reflect weaker demand for crude in the U.S. – oil prices remain elevated with WTI oil trading above $80.90 per barrel and are likely to range between this lower bound and the upper bound of $82.40 as the day progresses.
Next 24 Hours Bias
Weak Bearish
The post IC Markets Europe Fundamental Forecast | 27 June 2024 first appeared on IC Markets | Official Blog.
398560 June 27, 2024 13:21 Forexlive Latest News Market News
The dollar is holding in a decent spot on the week but is marginally lower today against the likes of the euro and sterling. The ranges for the day are still relatively narrow, so I wouldn’t look much into that. Instead, the focus stays on USD/JPY as it trades to its highest levels in more than three decades.
The pair touched a high of 160.87 overnight but is dragged back down to 160.30 levels now as caution is up in the air. There were some verbal pushback by Japanese officials since yesterday but buyers are not that intimated for now. But there is definitely some trepidation as we look towards European trading.
Coming up in the session ahead, we’ll have M3 money supply data and Eurozone economic confidence to work through. These aren’t any major releases whatsoever. As such, the focus will stay on USD/JPY above before we get to US trading. Then, there will be the weekly jobless claims which could give traders something to work with.
0800 GMT – Eurozone May M3 money supply
0900 GMT – Eurozone June final consumer confidence
0900 GMT – Eurozone June economic, industrial, services confidence
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
Full Article398556 June 27, 2024 13:05 FXStreet Market News
EUR/USD recovers its losses from the previous two sessions, trading around 1.0690 during the Asian session on Thursday. A technical analysis of the daily chart indicates a bearish bias, with the pair consolidating within a descending channel.
Additionally, the 14-day Relative Strength Index (RSI) is consolidating below the 50 level, suggesting a timid momentum for the EUR/USD pair.
The EUR/USD pair may test immediate throwback support at 1.0670. A further decline would reinforce the bearish bias, potentially pushing the pair toward the lower boundary of the descending channel near 1.0640.
On the upside, the EUR/USD pair could encounter immediate resistance at the 14-day Exponential Moving Average (EMA) at 1.0732. A break above this level could lead the pair to test the psychological level of 1.0800, approaching the upper boundary of the descending channel.
Further resistance appears at the vicinity of the significant level of 1.0900 and a three-month high at 1.0915, which was recorded on June 4.
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECBÂ’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the EurozoneÂ’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
398555 June 27, 2024 12:45 FXStreet Market News
The NZD/USD pair shows some resilience below the 50-day Simple Moving Average (SMA) and stages a modest recovery from the 0.6070-0.6065 area, or the lowest level since mid-May touched during the Asian session on Wednesday. The momentum lifts spot prices to a fresh daily top, around the 0.6085 zone in the last hour and is sponsored by a modest US Dollar (USD) weakness.Â
In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, reverses a part of the overnight strong move up to a nearly two-month peak amid bets that the Federal Reserve (Fed) will cut interest rates in September. Apart from this, the USD intraday slide lacks any obvious fundamental catalyst and is more likely to remain limited in the wake of the Fed’s hawkish outlook, forecasting only one interest rate cut in 2024.Â
Furthermore, the recent comments by a slew of influential FOMC members suggested that the US central bank is in no rush to start its rate-cutting cycle. This remains supportive of elevated US Treasury bond yields, which, along with a slight deterioration in the risk sentiment, could underpin the safe-haven USD. Apart from this, expectations that the Reserve Bank of New Zealand (RBNZ) will cut rates earlier than projected might cap the NZD/USD pair.
Traders might also prefer to wait on the sidelines ahead of the release of the crucial US Personal Consumption Expenditures (PCE) Price Index on Friday before placing fresh directional bets. In the meantime, Thursday’s US economic docket – featuring the release of the final Q1 GDP print, Durable Goods Orders, the usual Initial Weekly Jobless Claims and Pending Home Sales – will be looked for short-term opportunities later during the North American session.
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the FedÂ’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the FedÂ’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
398553 June 27, 2024 12:35 FXStreet Market News
The Indian Rupee (INR) recovers its recent losses on Thursday due to receiving support from the expectations of foreign inflows. Indian bonds are set to enter the JP Morgan Emerging Market (EM) Bond Index on June 28. Foreign investors have already invested approximately $10 billion into the securities eligible to join JPMorganÂ’s index, according to Business Standard. Meanwhile, Goldman Sachs anticipates at least $30 billion more in inflows in the coming months as IndiaÂ’s weighting on the index steadily rises to 10%.
The US Dollar (USD) depreciates possibly due to tradersÂ’ anticipation of FridayÂ’s Core PCE Price Index inflation, projected to decrease year-over-year to 2.6% from the previous 2.8%. This data is seen as the Federal Reserve’s (Fed) preferred inflation gauge. Market participants are hoping that signs of easing inflation will encourage the Federal Reserve (Fed) to consider rate cuts sooner rather than later.
The USD/INR trades around 83.50 on Thursday. The analysis of the daily chart shows a broadening pattern, indicating increasing volatility. This pattern suggests a potential correction before moving lower. The 14-day Relative Strength Index (RSI) is slightly above the 50 level, and a break below this level could signal a bearish bias.
Immediate support is at the 50-day Exponential Moving Average (EMA) at 83.40. A break below this level could push the USD/INR pair toward the lower boundary of the broadening bottom at around 83.30.
On the upside, resistance is expected at the upper boundary of the broadening formation at around 83.70, followed by the psychological level of 84.00.
The table below shows the percentage change of the US Dollar (USD) against listed major currencies today. The US Dollar was the weakest against the Australian Dollar.
 | USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF |
USD | Â | -0.12% | -0.08% | -0.06% | -0.27% | -0.16% | -0.10% | 0.00% |
EUR | 0.12% | Â | 0.03% | 0.06% | -0.14% | -0.04% | 0.02% | 0.10% |
GBP | 0.08% | -0.04% | Â | 0.02% | -0.17% | -0.07% | -0.01% | 0.06% |
CAD | 0.06% | -0.06% | -0.02% | Â | -0.19% | -0.10% | -0.04% | 0.05% |
AUD | 0.24% | 0.14% | 0.16% | 0.20% | Â | 0.11% | 0.15% | 0.26% |
JPY | 0.15% | 0.04% | 0.06% | 0.09% | -0.09% | Â | 0.05% | 0.13% |
NZD | 0.10% | -0.02% | 0.02% | 0.04% | -0.16% | -0.03% | Â | 0.15% |
CHF | 0.02% | -0.10% | -0.06% | -0.04% | -0.22% | -0.14% | -0.07% | Â |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than IndiaÂ’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
398552 June 27, 2024 12:33 Forexlive Latest News Market News
It’s all about whether a further run higher will trigger intervention from Tokyo at this stage. It’s a psychological game for the most part, and you can even coin it as a game of chicken. Do buyers have more resolve or does the conviction sit with Japanese authorities instead? The thing to watch is still whether or not this move is deemed as going too far, too fast.
In April, it took all but two days to jump from 155 to 160. This time around, the move is playing out in a span of about four weeks. But still, we’re back at the key threshold again in any case.
The overnight high touched 160.87 and price is now trading back to 160.30 levels on the day. So, we’re not seeing buyers run away with things just yet. There is definitely some caution in the air. But all else being equal, it seems likely buyers will keep gradually trying to test the limits here. That until Tokyo decides to step in again that is.
Full Article397950 June 27, 2024 12:29 SwingFish Trading Room Journal USDCAD
Today’s risk: 1.35% [Drawdown: 0.169%] (more…)
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