Last week saw a market breather with lighter economic data, but the spotlight remained on yields and the Dollar, both struggling to find significant momentum. As markets pause, let’s delve into the key movements that shaped the forex landscape.
Market Insights:
- US Dollar and Major Currencies:
- The US Dollar persisted in its downward trend as economic data remained mixed, pushing the DXY index down by 0.4% to 103.415.
- Euro’s slight resurgence came with favorable EU economic data in manufacturing and services PMI, yet it struggled to gain solid ground.
- Sterling shone with robust UK Services PMI results, driving GBPUSD over 1% higher, hovering close to the 1.26 mark, while EURGBP dropped 0.8% to 0.8672.
- Commodity Currencies and Oil:
- Despite Oil’s decline and yield rebounds, commodity currencies displayed strength: CAD and NOK rose 0.5%, AUD gained 1%, and NZD surged 1.5% against the Dollar.
- Oil’s underperformance persisted amid shifting market focus towards demand over supply, with WTI falling 1.2% to close at $75.13.
- Precious Metals and Equities:
- Precious metals continued their ascent; Gold rose 1.1% to $2002, nearing its all-time highs, while Silver rallied 2.6% to $24.33, inching towards a significant breakout level at $26.
- Equities indicated upward momentum; S&P500 rose 1% to close at 4558, and the DAX gained 0.7% to 16028 points.
- Bonds and Cryptocurrencies:
- Bonds retraced from resistance levels, likely eyeing an upward trend towards year-end. The 10y US yield bounced from 4.36% to close at 4.47%, while the 10y Bund fell 0.4% to 130.448 points.
- Despite Binance headlines, cryptocurrencies remained bullish: Bitcoin surged 3.6% to $37,800, and Ethereum rose 7.5% to $2,085.
The Week Ahead: The coming week is poised for activity, with a keen eye on yield movements and crucial data releases. The US Core PCE, GDP revision, global CPI, and PMI data are on the radar. Traders are advised to remain cautious and attentive amidst potential market shifts.
Conclusion: Amidst lighter economic data, markets witnessed a delicate balance between currencies, yields, and commodities. The Dollar’s struggle and mixed performances across assets demand close monitoring as key data releases and yield movements are anticipated to steer market sentiment in the days ahead.
