Wednesday April 3rd, 2024
The USD trading lower, equity markets are down, oil prices and treasury yields are up. The USD index is hovering near its four-month high. Market awaits Fed’s Powell speech early afternoon and Friday’s employment figures.
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In other news.? Taiwan hit with the strongest earthquake in nearly 25 years, triggering tsunami warning in Japan. Ukraine is lowering conscription age to 27 to 25 in an effort to replenish its depleted force.
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In currency news.?The JPY continues to trade near multi-decade low despite the underlying fear of a central bank intervention. The NZD remains under pressure due to its fundamentals. In the Asian currencies, the USD/JPY trades near 152 (up 0.11%), THB down 0.25%, MYR down 0.02%, AUD and NZD are down 0.08% and 0.05% respectively. The ZAR rallied 0.21% while the MXN hedged up 0.13%.
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In commodity markets.?Oil is up nearly 0.73%, Gold took a breather (down 0.38%) after another record high as growing tensions in the Middle East and U.S. interest rate cut hopes continued to push investors to the safe haven asset. Silver on the other hand rose 0.5% and copper reached an all-time high driven by strong demand outlook and supply concerns. On the agricultural side, Wheat is up over 1% while Soybean is up 0.26%.
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The USD/CAD continue to trade in a tight range with a small downward bias as oil continues to rise.
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The EUR/CAD after reaching a near 2-monrh low rallied slightly above 1.4600. The market seems to start discounting an ECB rate cut that perhaps may lead to a move higher on the currency pair.
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Euro zone inflation fell unexpectedly last month, solidifying the case for the European Central Bank to start lowering borrowing costs from record highs. Eurozone unemployment remained steady.
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GBP/EUR continues to hedge lower as UK economy inches closer to where the BoE can begin cutting rate, ECB’s spokesperson said he had no objection to a June cut but would like to see more data.
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The GBP struggles to extend recovery above 1.2580 in early morning trading. Market participants are waiting for the US employment figures to be released on Friday.
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