Here’s what to watch for on Tuesday, September 13:
It was a bad day for the USD which fell to the worst level in more than two weeks against a basket of currencies at the start of the week. The dollar index, DXY, which measures the currency against six major counterparts, softened despite a strong forecast that the Federal Reserve will raise interest rates by 75 basis points at its meeting on September 20-21. .
Sentiment had pushed the index to a two-decade high of 110.79 last Wednesday, but it fell to its lowest point since August 26, at 107.81, ahead of the US consumer price index. .of Tuesday. The US headline consumer price index is expected to fall 8% year-on-year in August, while the core measure, which excludes food and energy, is expected to rise.
Meanwhile, fueling the decline in DXY, the euro rose to more than a three-week high against the dollar, with European Central Bank officials calling for further aggressive monetary tightening. In addition, news broke that Ukrainian forces have made significant progress in pushing back Russian troops and this has also favored a better tone in European markets. The common European currency rose about 1.5% to 1.0198, its highest since Aug. 17. Aug 17, and well above the 20-year low of 0.9862 hit last week.
AUD/USD started the week in better supply and was up around 0.61% in late North America trading, having shed territory from early session highs near 0.69. The currency pair rallied from 0.6824 and remains in bullish territory due to USD weakness.
Regarding the yen, the USD rose modestly against the Japanese currency and the pair approached 143.50, but far from its 24-year high of 144.99 reached last week. Traders are watching for Japanese officials to hint at intervention to prevent the currency from weakening further. Over the weekend, a senior government official said in an interview on local television that the administration must take necessary measures to counter the yen’s excessive decline. However, the Bank of Japan’s ultra-accommodative stance is expected to remain unchanged at its next meeting scheduled for September 21-22.
The CAD rose to 1.2963 from 1.3045 and with no Canadian data scheduled for Monday, attention turned to the Bank of Canada’s recent 75 basis point hike. The central bank said further tightening will probably be needed to bring down inflation. The next BOC meeting is scheduled for October 26.
As for the pound, it rose to 1.1710 from 1.1600. UK industrial production fell slightly in July after falling further in June, although manufacturing output rebounded modestly after falling in June, according to data released on Monday. UK employment data will be released on Tuesday, followed by inflation data on Wednesday and retail sales on Friday. Those waiting for the Bank of England monetary policy meeting will have to wait until September 22 due to the 10-day mourning period following the passing of Queen Elizabeth II.
On the other hand, the main US indices have risen for four consecutive days. On the other hand, cryptocurrency investment funds and products saw total outflows for the fifth week in a row, totaling $63 million in the week ending Sept. 9, according to a report from digital asset manager CoinShares on Monday. . Cryptocurrency investment funds and products posted total outflows for the fifth week in a row, totaling $63 million in the week ending Sept. 9.
Gold is up 0.75% on the day, having moved from a low of $1,712.04 to a high of $1,735.18 so far, piercing the 61.8% Fibonacci level of daily bearish momentum.
Source: Fx Street