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Market Update - 05 September  2023

USD/RUB extends its upside above the 97.00 mark.The Russian Ruble extends its downside; Russia's budget is under pressure as a result of the Ukraine conflict. A mixed US employment data and upbeat manufacturing PMI decreases Fed tightening expectations. Investors await the US Factory Orders, the US ISM Services PMI.+

AUD/JPY trades lower around 94.20 amid RBA maintains interest rate at 4.10% China’s disappointing Caixin Services PMI weighed on the Australian Dollar (AUD). Investors seek RBA’s statement for insights into future rate hikes, following Australia’s GDP. Japan's Household Spending data declined the most since February, 2021.

AUD/NZD remains pressured at one-week low despite RBA’s inaction, risk-positive China updates. RBA keeps benchmark rates unchanged at 4.1%, shows readiness for rate hikes to tame inflation. China’s Country Garden managed to avoid default by paying $22.5 million US bond coupons. Softer China PMI contrasts with Beijing’s efforts to defend economic recovery and prods pair sellers.

AUD/USD comes under fresh selling pressure and is weighed down by a combination of factors. The disappointing Chinese PMI and RBA's on-hold decision drive flows away from the Aussie. Bets for one more Fed rate hike in 2023 underpin the USD and contribute to the ongoing decline.

EUR/USD fades the week-start rebound from a multi-day-old rising support line. ECB talks appreciate recent data but push back policy pivot concerns, hawks lack market acceptance. Upbeat US NFP, Moody’s upward revision to growth forecasts join hawkish Fed talks to defend US Dollar bulls. Bears flex muscles as slew of catalysts stand ready to fuel market moves after US holiday

The index resumes the upside and revisits 104.30. US markets return to the activity following Monday holiday. Factory Orders will be in the limelight later in the NA session. The USD Index (DXY), which tracks the greenback vs. a bundle of its main rival currencies, manages to pick up some pace and reclaim the 104.30 region on Tuesday.

USD/CAD rallies to over a four-month top and draws support from a combination of factors. Retreating Crude Oil prices undermines the Loonie and acts as a tailwind amid a bullish USD. Technical buying above the 1.3600 mark also contributes to the strong positive momentum.

EUR/GBP picks up bids to reverse week-start losses. ECB policymakers flash mixed signals but push back rates cuts and help Euro to stay firmer. Mixed UK spending data, fears about British recession keeps pair buyers hopeful. Eurozone PPI, ECB’s Lagarde and UK PMIs will be important for fresh impulse.

USD/MXN gains traction for the fourth consecutive day on Tuesday. The immediate resistance level is located at the 17.30-17.35 region; the initial support is seen at the 17.00-17.05 zone. Relative Strength Index (RSI) stands above 50, within bullish territory.

NZD/USD trades lower around 0.5880 after China’s downbeat Caixin Services PMI. Moderate jobs data contribute to support the US Dollar (USD). Investors seem to accept the nearing end of the rate-hike cycle by the Fed. China’s Country Garden made delayed interest payments, avoiding an immediate default.

USD/TRY extends its consolidative price move and remains confined in a range. The technical setup supports prospects for some meaningful appreciating move. A break below the ascending trend-line support will negate the positive outlook.

USD/RUB extends its upside above the 97.00 mark. The Russian Ruble extends its downside; Russia's budget is under pressure as a result of the Ukraine conflict. A mixed US employment data and upbeat manufacturing PMI decreases Fed tightening expectations. Investors await the US Factory Orders, the US ISM Services PMI.

USD/INR trades sideways as China’s stimulus reinforces the positivity in the market. China’s Country Garden made an agreement with creditors for an extension, undermining the US Dollar (USD). Traders expect no interest rate hike in the September meeting by the Fed.

USD/CHF picks up bids to refresh intraday high, reverses the previous day’s pullback from one-week high. Softer Swiss GDP growth contrasts with upbeat US NFP, firmer yields to keep pair buyers hopeful. US Factory Orders, risk catalysts may entertain intraday traders.

WTI Crude oil trades lower due to the reduction in the Chinese services economy. Market optimism buoyed by China’s fiscal measures has strengthened oil prices. OPEC+ is expected to extend production cuts through the end of 2023.

Silver remains under heavy selling pressure for the fifth straight day on Tuesday. A sustained break below the 200-period SMA on the 4-hour chart favours bears. The oversold RSI on hourly charts makes it prudent to wait for some consolidation.

Source: FXStreet

Disclaimer: This information does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties on the Internet.