Market Drivers – US Session, September 11

New Zealand will release data on electronic card retail sales during the Asian session, and Australian confidence polls are also due. The UK employment statistics and the German ZEW survey will be the important reports later in the day.

After several days of advances, the US Dollar Index’s (DXY) winning streak came to an end. The pullback was brought on by a slight uptick in risk sentiment. While the S&P 500 rose by 0.67%, the Nasdaq rose by 1.14%. The DXY retreated from above 105.00 to 104.55 as a result. The 10-year yield has been circling at 4.28% as US Treasury yields have been sideways.

The US Dollar’s direction could remain uncertain as key US economic reports are awaited. The Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday will provide more inflation data. These figures will be crucial in shaping expectations for the September 19-20 Federal Open Market Committee (FOMC) meeting.

CPI report is expected to print 0.2% m/m for a third consecutive month. Economists also look for a larger 0.6% gain for the headline, as gasoline prices surged. Importantly, the report is likely to show that the core goods segment stayed deflationary, while shelter-price gains probably slowed. Unrounded core CPI inflation forecast is 0.20%, so balanced risks are seen around any surprises in August.

EUR/USD reached a six-day high and is currently consolidating around 1.0750. The bias for the upcoming Asian session is tilted towards the upside, but the overall trend still remains to the downside. The German ZEW survey will be released on Tuesday. The focus is on the European Central Bank (ECB), which will have its monetary policy meeting on Thursday.

On Monday, Catherine Mann from the Bank of England said, “I would rather err on the side of over-tightening.” For the second time in the previous eight days, GBP/USD increased, rising to around 1.2550. Near the 200-day Simple Moving Average (SMA), there was a comeback. UK employment data will be released on Tuesday, while monthly GDP figures will be released on Wednesday.

Following remarks made by Governor Ueda of the Bank of Japan, who suggested that interest rates would increase by year’s end if wages rise sufficiently, the Japanese Yen jumped throughout the Asian session. The USD/JPY pair fell below the 146.00 mark and beneath the 20-day SMA before bouncing back to the 146.50 region.

USD/CAD fell for the second day in a row, hitting weekly lows close to 1.3550. If prices continue to trade below the 20-day SMA, which is currently around 1.3575, the picture may become bearish in the near term.

AUD/USD increased above 0.6400 as a result of a stronger Australian dollar and a recovery in commodity prices. In order to continue its rebound from multi-month lows, NZD/USD surged above 0.5900. Antipodean currencies now have a better outlook, and the current upbeat market mood suggests that more gains are probable.

Despite a setback during the American session, metal prices eventually surged. While Gold finished close to $1,920, much below the day’s high of $1,931, Silver closed above $23.00.