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Following Monday’s indecision, Forex markets remained bumpy early Tuesday, with investors avoiding significant holdings ahead of this week’s crucial central bank meetings. Eurostat will issue adjustments to the August Harmonized Index of Consumer Prices during the European session. Building Permits and Housing Starts will be featured on the US economic docket in the afternoon. Finally, Statistics Canada will release the August Consumer Price Index (CPI).
The minor recovery in risk sentiment prompted the US Dollar (USD) to lose some interest during Monday’s American trading hours. The USD Index, which measures the currency’s performance versus a basket of currencies. Six major currencies dropped 0.25% but remained over 105.00. Meanwhile, the benchmark 10-year US Treasury bond yield declined 0.6% to 4.3%, putting extra pressure on the USD. US Forex market index futures are trading flat on the day early Tuesday.
The heat map depicts the percentage fluctuations in major currencies against one another. The base currency is chosen from the left column and the quotation currency from the top row. For example, if you select the Euro from the left column and drag your cursor over the horizontal line to the Japanese Yen, the percentage change displayed in the box will be EUR (base)/JPY (quote).
Earlier in the day, the minutes of the Reserve Bank of Australia’s (RBA) September monetary policy meeting revealed thatPolicymakers agreed that the case to hold the policy rate steady was stronger as recent data did not materially alter the economic outlook. “Members recognize the value of allowing more time to see full effects from past tightening on the economy,” the RBA noted in its publication and reiterated that the policy will be guided by incoming data and the assessment of risks. AUDUSD showed no reaction and was last seen moving sideways slightly below 0.6450.
Forex Market movement in pairs.
USDCAD dropped below 1.3500 on Monday as the rising crude oil prices allowed the commodity-sensitive loonie to outperform its rivals. The barrel of West Texas Intermediate gained more than 1% on Monday and reached a fresh 2023-high above $92. On a yearly basis, the CPI in Canada is forecastTo grow 3.8%, following a 3.3% gain in July.
The EURUSD profited from USD weakening in the American session, closing the day in positive position before entering a stabilization period slightly around 1.0700 early Tuesday.
In the European session, the USDJPY remains below 148.00. Japanese Industry Minister Yasutoshi Nishimura stated on Tuesday that the Bank of Japan will eventually be unable to buy time with monetary policy. Separately, Japanese Prime Minister (PM) Fumio Kishida announced his intention to discuss Japan’s financial and economic policies in New York.
GBPUSD briefly surpassed 1.2400 on Monday before reversing course to close the day flat. The couple was last spotted traveling up and down the stairs. At about 1.2380, in a narrow channel.
On Monday, gold took advantage of falling US Treasury bond rates to reach a new two-week high above $1,930. XAUUSD fell slightly in the Asian session on Tuesday, but remained above that level.
