2023-10-09 09:16

Copyrighted Image by: Reuters The euro continues to experience a downturn, primarily driven by the risk-off sentiment due to escalating conflicts in the Middle East. This has led investors to favor the dollar over the European currency, contributing to its weakening. The situation is further exacerbated by China's disappointing Golden Week spending and a significant contraction in German industrial production, both of which have raised concerns about regional growth and added pressure on the euro. The bleak economic outlook in Europe continues to weigh heavily on the local currency. Despite these challenges, ECB's Knot expressed comfort with the current rates, aligning with projections made earlier this month to maintain these levels. His stance has done little to alleviate the downward pressure on the euro. Adding to this complex financial landscape are anticipated speeches from Federal Reserve officials following last Friday's Non-Farm Payrolls (NFP) print. These speeches are expected to provide hints about the upcoming US Consumer Price Index (CPI) report. In terms of trading, the EUR/USD daily chart reveals a recent selloff of the euro, although it remains above the 1.0500 psychological handle. Resistance levels are currently at 1.0635 and 1.0600, while support levels sit at 1.0500 and 1.0443. IG client sentiment data indicates a mixed position among traders, with 67% holding long positions on EUR/USD. This suggests that while some traders anticipate a recovery for the euro against the dollar, a significant portion remains cautious due to ongoing global uncertainties and regional economic concerns. https://www.investing.com/news/forex-news/euro-weakens-amid-middle-eastern-conflict-and-regional-growth-concerns-93CH-3193743

2023-10-09 07:53

Copyrighted Image by: Reuters. In the wake of a surprise assault by Hamas on Saturday, the Bank of Israel has taken decisive action to shield the depreciating shekel, which has been under significant pressure due to political instability and fears of a constitutional crisis. As of Monday, the shekel had weakened more than 2% against the dollar, equating to ILS 3.92 per dollar. The central bank's strategy includes selling up to $30 billion in foreign exchange and establishing a $15 billion derivatives exchange mechanism. This mechanism is designed to ensure market liquidity amidst the ongoing conflict near the Gaza border, which has already resulted in approximately 1,100 deaths and a significant number of critical injuries. The tension has also led to a surge in oil prices due to concerns about potential disruptions to Middle Eastern supplies. In addition to these measures, the Bank of Israel will provide dollar liquidity through SWAP financial contracts. These contracts will act as a safety net for local institutional investors and lenders if necessary, according to Rafi Gozlan, chief economist at IBI Investment House Ltd. Despite these efforts by the Bank of Israel, the shekel continues to face challenges. It has already depreciated nearly 10% this year due to ongoing political instability and fears over a potential constitutional crisis. https://www.investing.com/news/forex-news/bank-of-israel-takes-action-to-stabilize-shekel-amid-escalating-conflict-93CH-3193608

2023-10-09 02:58

Copyrighted Image by: Reuters. Investing.com - The safe-haven U.S. dollar gained in early European trade Monday as the escalation of the conflict in the Middle East hit risk sentiment, following on from last week’s strong payrolls report. At 03:00 ET (07:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.4% higher at 106.204. Safe havens boosted by Middle East conflict escalation The dollar was in demand Monday in the wake of the deadly attacks by militants from the Palestinian group Hamas on several Israeli towns over the weekend. In response, Israeli air strikes pounded numerous targets in Gaza, in the deadliest day of violence in the country for 50 years. USD/JPY fell 0.1% to 149.16, as the yen also received support, but trading ranges were limited with Japan closed for a holiday. By contrast, the Israeli shekel fell to an almost eight-year low against the U.S. dollar at 3.9230, prompting the Bank of Israel to announce it will sell up to $30 billion of foreign currency in the open market, in the central bank's first ever sale of foreign exchange, to maintain stability. The move appeared to quickly calm the market, with the USD/ILS pair falling back to 3.9063, up 1.8%. CPI data could reinforce Fed’s hawkish tone The greenback had benefited late last week by the release of stronger than expected payrolls data, with Friday’s release showing U.S. employment increased by the most in eight months in September. Indications of a still tight labor market will put the focus even more on this week’s release of consumer inflation data for September, given hot inflation figures could reinforce the Fed’s message that interest rates need to remain higher for longer.. August’s CPI report showed the fastest increase in 14 months as the cost of gasoline surged, although core inflation, which excludes food and fuel costs rose at the slowest pace in nearly two years. German industrial output falls again EUR/USD fell 0.4% to 1.0541, with the single currency hit hard by the weakened risk sentiment in the wake of attacks on Israel. Oil prices have jumped sharply in response, which has a negative impact on the single currency given Germany, the eurozone’s dominant economy, has a high exposure to energy costs. Additionally, German industrial output shrank in August for the fourth consecutive month, dropping 0.2% compared to the previous month, slightly more than the 0.1% fall expected. The statistics office revised July production data to a 0.6% decline month-on-month, compared with a provisional figure of a 0.8% drop. Elsewhere, GBP/USD fell 0.5% to 1.2179, AUD/USD dropped 0.6% to 0.6345 and NZD/USD fell 0.4% to 0.5963, with these risk-sensitive currencies hit hard. https://www.investing.com/news/forex-news/dollar-benefits-from-safehaven-status-as-middle-east-rages-3193277

2023-10-08 18:17

Copyrighted Image by: Reuters On Sunday, the U.S. dollar and the Japanese yen slightly increased from their positions late Friday, following violent incidents in Israel over the weekend. This rise indicates the profound impact that Middle Eastern turmoil can have on global financial markets, particularly on the USD. The USD's status as a safe-haven currency is reinforced during periods of geopolitical instability or economic uncertainty. Under these conditions, investors tend to shift their capital towards safer assets like U.S. sovereign debt and the USD itself. The weekend's disturbances in Israel provide a recent example of such a shift. In addition to impacting currency values, Middle Eastern issues often trigger a surge in oil prices. However, it's important to note that this trend is not always immediate and can depend on various factors including the severity of the situation and its potential implications on oil production and supply chains. On the foreign exchange front, current rates as of Sunday are as follows: EUR/USD stands at 1.0565, USD/JPY at 149.09, GBP/USD at 1.2204, USD/CHF at 0.9093, USD/CAD at 1.3664, AUD/USD at 0.6366, and NZD/USD at 0.5971. Market liquidity typically sees a boost on Monday mornings when various Asian centers initiate trading activities. This pattern could potentially influence these rates in the immediate future, depending on how investors respond to the ongoing geopolitical scenario. https://www.investing.com/news/forex-news/usd-and-yen-rise-amid-middle-east-tensions-and-market-uncertainty-93CH-3193165

2023-10-06 10:29

Investors are favoring the euro and British pound today, Friday, as they await the US employment report that may indicate steady hiring ahead of a potential downturn. The report, however, might not offer clear guidance on future Federal Reserve policy due to overlooked household financial conditions and strikes. Economists predict an increase of 173,000 jobs in September, but forthcoming data could suggest a significant drop, providing mixed signals and boosting demand for risk assets. Changes in the labor market and average earnings could heavily impact the Federal Reserve's future rate plans amidst escalating borrowing costs and a shrinking labor market. This could potentially prompt policymakers to abandon their hawkish stance as they approach the end of the tightening cycle. The EUR/USD technical picture indicates demand for the euro, with major players' support being crucial for maintaining control at specific levels. The GBP/USD position remains uncertain until control over 1.2190 is regained, with a potential for recovery towards 1.2220 and a possible touch at 1.2060. In other market news today, European stocks recorded modest gains ahead of the US payrolls report, mirroring similar progress in Asian markets. This report is projected to reflect a hiring slowdown in September, which could lessen pressure on the Federal Reserve to hike interest rates further. Miners led the Stoxx 600 index following discussions between a Chinese iron-ore buying agency and global suppliers. Energy stocks struggled due to concerns over demand and Brent crude's largest weekly fall since March. Shares of Royal Philips NV fell by 8.5% after agreeing to additional testing on certain devices. Despite minor losses in the Nasdaq 100 and S&P 500, US equity futures remained stable. The nonfarm payrolls report is anticipated to show that US employers hired 170,000 workers in September, down from August's 187,000. This contrasts with the weaker than expected ADP employment report. Investors, including Barclays Private Bank's chief market strategist Julien Lafargue, are closely watching wage growth figures and job creation numbers. The 10-year Treasury yield held at 4.74%, with Societe Generale (OTC:SCGLY) strategist Kenneth Broux suggesting that upcoming payrolls data and inflation figures, including CPI numbers, will influence its movement. Asian stocks were lifted by gains in Hong Kong's Hang Seng Index and optimism surrounding Golden Week consumption trends. San Francisco Fed President Mary Daly hinted that the central bank may keep rates on hold if inflation and the jobs market cool. In the cryptocurrency market, Bitcoin rose slightly to $27,515.87 while Ether increased to $1,624.19. The MSCI Emerging Markets Index rose by 0.7%. https://www.investing.com/news/forex-news/euro-and-british-pound-gain-traction-as-investors-anticipate-us-employment-report-93CH-3192522

2023-10-06 03:36

Copyrighted Image by: Reuters Investing.com - The U.S. dollar traded higher Friday, on course for another positive week, ahead of the release of the monthly U.S. nonfarm payrolls which could influence Federal Reserve thinking. At 03:40 ET (07:40 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 106.279, below the 11-month high of 107.34 seen earlier in the week, but still on track for 12 straight weeks of gains. September jobs data due The September employment report is due later in the session, and is expected to show that 170,000 jobs were created in the month, down slightly from the prior month. The unemployment rate comes out at the same time, and is expected to tick lower to 3.7% from 3.8% in August. It's been a mixed week for labor market data, starting out with higher than expected job openings as of the end of August, then lower than expected private payroll numbers from ADP. Thursday's unemployment claims ticked up from the prior week but were slightly below expectations. That said, the data has generally been pretty resilient, reinforcing the Fed's rhetoric of higher-for-longer rates, causing U.S. Treasury yields to soar and thus supporting the dollar. “Market pricing remains well below the FOMC dot plot expectations,” said analysts at ING, in a note. “Ultimately, there is still room for a hawkish repricing at the front end of the USD curve, and the dollar’s upside risks remain substantial.” Euro edges higher after German factory orders rise EUR/USD rose 0.1% to 1.0535, remaining above this week's fresh low of 1.0448, but the euro remains on course for a record losing run of 12 successive weeks against the dollar. The single currency was helped by the news that German industrial orders rose more than expected in August, climbing by 3.9%, a significant improvement from the revised July drop of 11.3%. “EUR/USD has rebounded from the 1.0450 lows but may lack enough buyers above the 1.0530/1.0550 area,” added ING. “The dollar remains an expensive sell, and there simply isn’t a compelling story in the eurozone to counter the U.S. exceptionalism narrative.” Yen gains but remains below 150 USD/JPY climbed 0.2% to 148.86, remaining below the 150 level seen earlier this week which prompted speculation that Japanese authorities could have intervened in the currency market to shore up the battered yen. Elsewhere, GBP/USD edged higher to 1.2193, with U.K. house prices falling 0.4% on the month in September, according to data from Halifax, an improvement from the fall of 1.8% the prior month. https://www.investing.com/news/forex-news/dollar-edges-higher-ahead-of-key-us-payrolls-release-3192048