Market Update - 25 September 2023

USD/CAD trades sideways near 1.3476 amid the USD weakness. Canadian Retail Sales for July rose by 0.3% vs. 0.1% prior; Core Retail Sales climbed by 1.0% vs. -0.7% prior. US S&P Global Manufacturing PMI showed an ongoing contraction in the manufacturing sector's business activity. The US Core Personal Consumption Expenditure (PCE) Price Index will be a closely watched event. (FXStreet)

USD/JPY refreshes YTD top during the Asian session on Monday, albeit lacks follow-through. Intervention fears, along with a softer risk tone, underpin the JPY and caps gains for the pair. The Fed-BoJ policy divergence still favours bulls and supports prospects for a further move up. (FXStreet)

GBP/JPY lacks any firm intraday direction on Monday and oscillates in a narrow trading band. Intervention fears, China's economic woes benefit the JPY and act as a headwind for the cross. The BoE’s surprise pause contributes to cap, though the BoJ’s dovish stance limits the downside. (FXStreet)

USD Index (DXY) hovers below the six-month high before the slew of US economic data. Investors turn cautious ahead of US Core PCE, awaiting further cues on US inflation scenarios. Fed’s hawkish stance could reinforce the Greenback’s strength. US Treasury yields peaked at multi-year highs, supporting the US Dollar (USD). (FXStreet)

EUR/USD oscillates in a narrow range on Monday and seems vulnerable to decline further. The Fed’s hawkish outlook continues to underpin the USD and cap the upside for the pair. Looming recession risks and the ECB’s dovish rate hike further seem to weigh on the Euro. (FXStreet)

EUR/GBP looks to gain ground above 0.8700 psychological level. Eurozone PMI data provided support for the Euro. BoE’s surprise decision to pause its rate hike cycle has undermined the Pound Sterling (GBP). (FXStreet)

USD/CHF climbs to a fresh multi-month peak and draws support from a combination of factors. Bets for more Fed rate hikes continue to push the US bond yields higher and underpin the USD. The SNB's surprise pause continues to weigh on the CHF and supports prospects for further gains. (FXStreet)

USD/MXN struggles to gain any meaningful traction and oscillates in a range on Monday. The technical setup supports prospects for some meaningful upside amid a bullish USD. A break below last week's swing low will shift the bias back in favour of bearish traders. (FXStreet)

NZD/USD attempts to extend gains due to soft US Dollar (USD). RBNZ’s OCR rate hike is being priced in as the economy appears to be more resilient. Improved US Treasury yields could provide support for the Greenback. (FXStreet)

USD/INR catches fresh bids on Monday and draws support from a bullish USD. Neutral oscillators on the daily chart warrant some caution for bullish traders. Any meaningful slide might continue to attract fresh buyers and remain limited. (FXStreet)

AUD/USD trades lower near 0.6420 ahead of economic data from both nations. RBA is expected to be dovish on interest rates trajectory; putting pressure on the Aussie pair. The hawkish remarks made by Fed officials could bolster the US Dollar (USD). Investors await the US Core PCE, seeking further cues on the US inflationary pressure. (FXStreet)

Gold price remains under pressure as the US economy remains resilient despite higher interest rates. The US economy is comfortably absorbing the consequences of the Fed’s higher interest rates. Fed’s Collins says further policy tightening is not off the table. (FXStreet)

Source: FXStreet

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