This is what you need to know to trade today Thursday September 8:
Before he European Central Bank (ECB) announces its monetary policy at 12:15 GMT, markets remain relatively calm. The ECB is expected to raise its interest rate by 75 basis points (bps), but some experts believe there is still a relatively strong chance that the bank will go for a 50bp rate hike. The ECB will also publish its updated economic projections and the President of the ECB, Christine Lagarde, will offer his comments on the political decisions at a press conference starting at 12:45 GMT. Meanwhile, the FOMC chairman’s speech, Jerome Powellat 13:10 GMT, will be closely watched by market participants as the Fed prepares to enter the “quiet period” on Saturday.
See: Preview of the European Central Bank: Between Putin and high inflation, the deck is against the euro
After reaching its highest level in 20 years at 110.78 on Wednesday, the DXY dollar index drifted lower during the American session and ended up losing more than 0.5% on the day. The positive risk environment in the markets, reflected in the decisive rebound of the main Wall Street indices, made it difficult for the dollar to maintain its strength. Furthermore, the Fed noted in its Beige Book that companies were seeing progress in labor supply and price pressures, which meant an additional weight for the dollar. US stock index futures are trading in negative territory in European morning Thursday and the benchmark 10-year US Treasury yield is posting small losses of around 3.25%, pointing to a cautious market environment.
The EUR/USD gained almost 100 pips on Wednesday and tested the parity level early on Thursday before entering a consolidation phase.
See: ECB forecast: Do tough times call for tough action?
The GBP/USD fell on Wednesday to its lowest level since March 2020, near 1.1400, after Bank of England officials adopted a cautious tone on monetary policy and the economic outlook. With the dollar facing strong selling pressure in the American session, the pair rallied towards 1.1500. At the time of writing, GBP/USD is down 0.35% on the day, trading at 1.1485.
The AUD/USD remains lower in early Thursday hours and is trading negative below 0.6750. Australian data showed earlier in the Asian session that exports decreased by 9.9% year-on-year in July.
The USD/JPY pulled back from a multi-decade high of 145.00 on Wednesday, but closed the day in positive territory. The pair remains relatively calm below 144.00 early on Thursday. Data from Japan showed that the economy expanded at an annualized rate of 3.5% in the second quarterexceeding the market expectation of 2.9%.
The Prayed took advantage of falling US yields on Wednesday and posted strong gains. XAU/USD is trading sideways in a tight channel below $1,720 in European morning Thursday.
On Wednesday, the Bank of Canada raised its interest rate by 75 basis points, down to 3.25%, as expected. In its monetary policy statement, the Bank of Canada said that rates will have to continue to rise given the inflation outlook. The USD/CAD It fell nearly 100 points from a multi-week high reached above 1.3200 during the American session on Wednesday. At time of writing, the pair is trading in a tight range below 1.3150.
After Tuesday’s sharp drop, the Bitcoin gained almost 3% on Wednesday, but lost its upside momentum before reaching $20,000. The ethereum found support near $1,500 and was up 4.5% on Wednesday. ETH/USD is trading in negative territory early Thursday but manages to hold above $1,600.
Source: Fx Street
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