Here is what you need to know about forex.
The US Dollar (USD) outperformed its peers early Tuesday. Despite a deteriorating Forex market sentiment and increasing US Treasury bond yields. After finishing in positive territory on Monday, the USD Index is trading at its highest level since November above 106.00. While the 10-year US yield is at multi-year highs above 4.5%. The US economic calendar will include August New Home Sales. And the Conference Board’s Consumer Confidence Index for September.
Forex market movememnts in pairs.
Reflecting the risk-averse Forex market environment. US stock index futures are down 0.5% to 0.8% in the early European session. While the Euro Stoxx 50 Index is down almost 1% on the day. Meanwhile, earlier in the day, Bloomberg reported that Senate Republican and Democratic negotiators were nearing an agreement on a short term budget bill to avert a government shutdown. This discovery, however, did not assist to brighten the atmosphere.
On Monday, the EURUSD fell more than 50 pips and fell below 1.0600 for the first time since early March. On Tuesday, the pair trades in a narrow channel near Monday’s close. Speaking before the European Parliament’s Economic and Monetary Affairs Committee. European Central Bank (ECB) President Christine Lagarde stated that recent data indicate to continuing weakening in economic activity in the third quarter.
GBPUSD fell further in the Asian session on Tuesday. Reaching a new multi-month low below 1.2170 before rebounding moderately near 1.2200.
The USDJPY rose above 149.00 on Tuesday before reversing sharply. Investors are concerned about the likelihood of the Bank of Japan meddling in currency markets. On Tuesday, Japan’s newly appointed Economy Minister Yoshitaka Shindo highlighted the importance of currencies moving in a steady way that reflects fundamentals. “Weak Yen has various effects on economy such as raising import costs for consumers, improving competitiveness of exporters,” said Shindo.
Due to increasing US rates, gold prices dropped on Monday and went below $1,910 early Tuesday. XAUUSD, on the other hand, recovered its daily losses and was last seen trading sideways at approximately $1,915.
