Market Roundup
•Canada Core Retail Sales (MoM) (Jul): 0.4%, 0.2% forecast, 0.3% previous
•Canada IPPI (MoM) (Aug): -0.8%, -0.3% forecast, -0.1% previous
•Canada IPPI (YoY) (Aug): 0.2%, , 2.8% previous
•Canada Retail Sales (MoM) (Jul): 0.9%, 0.5% forecast, -0.2% previous
•Canada RMPI (YoY) (Aug): -2.5% , 4.1% previous
•Canada RMPI (MoM) (Aug): -3.1%, -2.0% forecast, 0.7% previous
•EU Consumer Confidence (Sep): -12.9, -13.0 forecast, -13.4 previous
Looking Ahead Economic Data(GMT)
•No data ahead
Looking Ahead Events And Other Releases (GMT)
•No Events ahead
EUR/USD: The euro steadied against the dollar on Friday, driven by strong risk appetite after a substantial interest rate cut from the U.S. Federal Reserve. The Fed’s 50-basis-point reduction on Wednesday, along with lower-than-anticipated jobless claims, sparked optimism about a soft landing for the U.S. economy. Claims for the week ending Sept. 14 dropped to a four-month low, exceeding market forecasts. Current market expectations suggest a nearly 44% chance of another 50 bps cut in November, with a total of 72 bps anticipated by year-end. By the end of 2025, rates are expected to stabilize at 2.85%, in line with the Fed's neutral outlook. Immediate resistance is noted at 1.1198 (23.6%fib), with a breakout potentially pushing the pair towards 1.1218 (Higher BB). On the downside, immediate support is at 1.1111 (38.2%fib), a drop below this level could lead the pair towards 1.1049(50%fib).
GBP/USD: Sterling rose against the dollar following robust data revealing a 1% increase in British retail sales for August, exceeding expectations. The Office for National Statistics also revised July's sales volume uptick to 0.7%, from an earlier estimate of 0.5%. On Friday, this positive retail data propelled the currency’s upward momentum. Earlier in the week, Sterling had gained as August inflation remained steady, but the services sector saw a rise to 5.6% from July’s 5.2%, a key focus for the Bank of England. Additionally, the Bank's decision to maintain interest rates at 5.0% on Thursday further bolstered the currency. Immediate resistance can be seen at 1.3331(23.6%fib), an upside break can trigger rise towards 1.3361(Higher BB).On the downside, immediate support is seen at 1.3278(Daily low), a break below could take the pair towards 1.3196(38.2%fib%fib).
USD/CNY: The dollar dropped to its lowest level against the Chinese yuan in nearly 16 months on Friday, influenced by expectations of new economic stimulus from Beijing after a notable U.S. rate cut. The yuan is benefiting from increased corporate demand, with more exporters opting to settle their foreign exchange receipts, a trend likely to gain momentum. Since late July, the yuan has risen about 3%, recovering its earlier losses as the dollar weakened in response to anticipated U.S. rate reductions. The Fed's larger-than-usual 50-basis-point cut on Wednesday played a key role in this shift. Strong resistance can be seen at 7.064 (38.2 %fib), an upside break can trigger rise towards 7.086 (50 %fib). On the downside, immediate support is seen at 7.039(23.6 %fib), a break below could take the pair towards 7.000(Psychological level).
USD/CAD: The Canadian dollar held steady against the U.S. dollar on Friday, bolstered by data showing stronger-than-expected Canadian retail sales in July, even as the greenback gained against other major currencies. Canadian retail sales rose by 0.9% in July compared to June, surpassing forecasts of a 0.6% increase. A preliminary estimate also indicated a 0.5% uptick in sales for August. The price of oil, a key export for Canada, continued its weekly rise, increasing by 0.5% to reach $72.34 a barrel.Canadian bond yields moved higher across the curve. The 10-year was up 1 basis point at 2.937%, having rebounded from a 16-month low on Tuesday at 2.829%. Immediate resistance can be seen at 1.3575(38.2%fib), an upside break can trigger rise towards 1.3634 (50%fib).On the downside, immediate support is seen at 1.3053 (23.6%fib), a break below could take the pair towards 1.3444 (Sep 9th low).
USD/JPY: The dollar gained ground against the yen on Friday after the Bank of Japan indicated it was not in a hurry to raise interest rates, maintaining them at 0.25% as anticipated. The BOJ also upgraded its outlook on consumption, suggesting confidence in a robust economic recovery that could enable future rate hikes. Following the conclusion of its two-day meeting, the bank kept short-term interest rates steady at 0.25%. The dollar rose as high as 144.50 yen , reaching its highest level since early September. It was last up 0.92% at 143.73. Strong resistance can be seen at 144.27 (38.2%fib), an upside break can trigger rise towards 145.00 (psychological level). On the downside, immediate support is seen at 140.60(23.6%fib), a break below could take the pair towards 139.34(Lower BB).
Equities Recap
European shares dipped on Friday following a rally the day before, which was fueled by the U.S. Federal Reserve's significant interest rate cut.
UK's benchmark FTSE 100 closed down by 1.19 percent, Germany's Dax ended up by 1.49 percent, France’s CAC finished the day down by 1.51 percent.
Dow Jones closed up by 0.09 percent, S&P 500 ended down by 1.90 percent, Nasdaq finished the day up by 0.35 percent.
Wall Street pulled back from record highs on Friday, and the dollar steadied as the market adjusted to the beginning of a rate-reduction cycle initiated by the U.S. Federal Reserve’s significant mid-week cut.
Commodities Recap
Gold surged past the $2,600 mark on Friday for the first time, driven by expectations of further U.S. interest rate cuts and escalating tensions in the Middle East.
Spot gold rose 1.3% to $2,620.63 per ounce, while U.S. gold futures climbed 1.2% to settle at $2,646.20.
Oil prices settled lower on Friday but recorded a second straight week of gains, garnering support from a U.S. interest rate cut and a dip in U.S. supply.
Brent futures settled down 39 cents, or 0.52%, at $74.49 a barrel. U.S. WTI crude futures settled down 3 cents, or 0.4%, to $71.92.
