Market Drivers – US Session, September 4

The Reserve Bank of Australia meeting will be the focal point of the Asian session. The interest rates are not anticipated to alter. Additionally, the Services PMIs’ final reading will be made public. Data on US factory orders and wholesale inflation in the Eurozone are due later in the day.

In a calm session with Wall Street closed for Labour Day, the US Dollar Index slightly declined and hovered above 104.00, close to monthly highs. US stock futures slightly declined. July factory orders are due on Tuesday.

In her speech on Monday, Christine Lagarde, president of the European Central Bank (ECB), made no new revelations. German trade data came in stronger than anticipated, but investor confidence in the Eurozone fell even more in September, to -21.5. Although EUR/USD slightly increased, it was unable to hold its gains above 1.0800. Support is located at 1.0760, with the negative bias still present. Lagarde will speak once again, Eurostat will present the August Producer Price Index, and the final Service PMIs are scheduled to be released on Tuesday.

GBP/USD rose from below 1.2600 to the 1.2630 area. The Pound outperformed with EUR/GBP falling below 0.8550. The final Service PMI from the UK is due on Tuesday. USD/JPY continued to rise and climbed to the 146.50 area. A consolidation above that level would strengthen the bullish outlook.

Despite a weaker US Dollar, the AUD/USD pair concluded with slight gains. On Tuesday, the Reserve Bank of Australia (RBA) is expected to make its monetary policy announcement. It’s expected that the RBA will keep its benchmark interest rate at 4.1%. This will be the last meeting with Philip Lowe as governor of the RBA.

USD/CAD maintained its gains from Friday but struggled to decisively break above 1.3600. The Bank of Canada will have its monetary policy meeting on Wednesday.

For the third day in a row, gold prices ended close to $1,940. After failing to rise above $1,950 and the 100-day SMA, it is still trading sideways. Silver lost money for the fourth day in a row, falling just under $24.00.

The price of crude oil continued its recent upward trend, with the WTI barrel currently trading at about $85.00. Increases in output from Saudi Arabia and Russia, as well as expectations for more Chinese stimulus measures, helped to underpin these advances.

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