Attention remains focused on the recovery of the Dollar and the decline in stock prices. During the Asian session, key releases include the New Zealand NZD business confidence report and Australian retail sales. Later, attention will turn to preliminary September inflation figures from Spain and Germany. In addition, Eurozone business and consumer confidence data will be published. In the United States, weekly unemployment benefit claims and GDP for the second quarter will be published.
Here’s what you need to know on Thursday, September 28:
The Dollar Index rose 0.45%, marking its fourth consecutive daily rise and reaching its highest closing level since November. Rising Treasury yields, upbeat US data and risk aversion in markets supported the dollar’s strength.
The 10-year Treasury yield stood at 4.60%, the highest level since 2007. At the same time, US stocks finished mixed, indicating that negative sentiment prevails. The Dow Jones fell 0.20%, while the Nasdaq gained 0.22%.
Data released on Wednesday showed a surprising 0.2% increase in durable goods orders for August, against expectations for a 0.5% decline. Weekly jobless claims, the third revision of second-quarter growth numbers and pending home sales will be released on Thursday.
Wells Fargo Analysts on Durable Goods Orders:
Durable goods orders beat expectations and rising shipments of core capital goods will lift third-quarter business spending estimates. However, after ruling out an increase in defense spending and taking into account the sharp downward revisions, the report is much less interesting.
EUR/USD accelerated its decline and reached levels below 1.0500, not seen since January. Spain and Germany will publish preliminary figures for the Consumer Price Index (CPI) for September. Spain is expected to show a rebound in its annual inflation rate, while Germany is expected to report a significant drop. These initial inflation figures are crucial in shaping monetary policy expectations and can impact markets. In addition, Eurostat will report on business and consumer sentiment.
Sebastian-B Becker, Chief Economist at Deutsche Bank Research, on German inflation:
Due to the disappearance of two large base effects, stemming from last summer’s fuel discount and the 9 euro bill, we expect the German CPI headline and core inflation rates to fall substantially again in September. In this context, we estimate that the two aforementioned effects could have boosted the year-on-year figures between June and August by up to ¾ pp. Specifically, we expect the general CPI to increase by 0.35% month-on-month, which would translate into a considerable drop in the year-on-year rate to “only” 4.6%.
Rising yields have contributed to the bullish momentum of the USD/JPY, pushing the pair above 149.50. With the 150.00 level within reach, Japanese authorities may consider verbal interventions or even more significant actions to address the depreciation of the Japanese yen.
GBP/USD continued its downward trend for the sixth consecutive day, although the pace of decline slowed. The pair hit a low of 1.2110 before bouncing to 1.2140.
Despite the risk aversion observed in the market, the USD/CHF It continued to rise and surpassed the 0.9200 level. On the daily chart, the Relative Strength Index (RSI) is at 85.50, a record level.
The Australian dollar (AUD) was negatively affected by risk aversion sentiment. The pair AUD/USD It broke below the 0.6355 level and continues to suffer downward pressure as long as it remains below that level. The pair recorded its lowest closing price since November. On Thursday, Australia is expected to report a 0.3% increase in Retail Sales for August.
Similarly, the New Zealand Dollar (NZD) saw a second consecutive day of decline against the US Dollar, but the NZD/USD pair managed to hold above the 0.5900 level. The New Zealand ANZ business confidence survey will be released on Thursday.
The Canadian Dollar (CAD) outperformed the rest of the major currencies, resulting in a modest decline in USD/CAD to 1.3500. The recovery in crude oil prices supported the CAD. The price of WTI crude oil rose 3.50%, exceeding $93.50.
On the contrary, the price of Gold fell below $1,900 and plummeted to $1,872, reaching its lowest level since March. The Silver experienced a drop of 1.25%, reaching $22.40; Eyes turn to monthly lows and medium-term support around $22.00.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
