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  |   Market Roundups


America’s Roundup: U.S. dollar soars to 24-year high vs yen, Wall ends higher, Gold gains, Oil settles below $90 as recession fears mount-September 8th,2022

Market Roundup

• Canada Jul Exports 68.25B,69.90B previous

• US Imports 259.30B, 260.80B previous

• US Imports 329.90B, 340.40B previous

• US Redbook (YoY) 10.9%,14.2% previous

• Canada Aug Ivey PMI 60.9, 48.3 forecast,49.6 previous

• Canada BoC Interest Rate Decision3.25%, 3.25% forecast,2.50% previous

Looking Ahead – Economic data (GMT)

•01:30   Australia Jul Imports (MoM)   1.0% previous

• 01:30  Australia Jul Trade Balance  14.500B forecast, 17.670B previous

•01:30   Australia Jul Exports (MoM)  5.0% previous

Looking Ahead - Events, Other Releases (GMT)

•03:05   Australia RBA Governor Lowe Speaks

Currency Summaries

EUR/USD: The euro rose against dollar on Wednesday as markets raised their bets on a 75 basis-point rate hike from the European Central Bank when it meets on Thursday.The ECB is this week expected to deliver a second big rate hike to tame record-high inflation just as a halt to Russian energy supply fans further inflation and recession fears in the bloc.Having factored in a more than 90% chance that the ECB would hike by 75 bps earlier this week, euro zone money markets lowered those bets on Tuesday in reaction to several media reports, including one that said a 50 bps rate hike remained on the table.. Immediate resistance can be seen at 1.0042(21DMA), an upside break can trigger rise towards 1.0074(38.2%fib).On the downside, immediate support is seen at 0.9976(10DMA), a break below could take the pair towards 0.9865(23.6%fib).

GBP/USD: Britain's battered pound fell to its lowest level against the U.S. dollar since 1985 on Wednesday, lurching lower as investors dumped British assets in the face of a bleak economic outlook and the soaring dollar. Sterling has been hit hard by surging inflation, a looming recession and concerns that tax cuts and increased public spending under a new government could exacerbate price pressures. The currency, down more than 15% against the dollar so far this year, is also a headache for the Bank of England since it increases the cost of imports and can cause more imported inflation. Sterling was last down 0.4% at $1.1475 after clawing back some ground. Immediate resistance can be seen at 1.1533(38.2%fib), an upside break can trigger rise towards 1.1591(9DMA).On the downside, immediate support is seen at 1.1416(23.6%fib),a break below could take the pair towards 1.1323(Lower BB).

USD/CAD: The Canadian dollar edged higher against its U.S. counterpart on Wednesday, with the currency rebounding from its lowest level in nearly eight weeks as investor sentiment picked up and the Bank of Canada raised interest rates to a 14-year high. The BoC hiked its benchmark rate by three-quarters of a percentage point to 3.25%, as expected, and signaled its most aggressive tightening campaign in decades was not yet done as it battles to tame inflation.The loonie was trading 0.1% higher at 1.3135 to the greenback, or 76.13 U.S. cents, after earlier touching its weakest since July 14 at 1.3208.Immediate resistance can be seen at 1.3135(38.2%fib), an upside break can trigger rise towards 1.3204 (23.6%fib).On the downside, immediate support is seen at 1.3100 (10DMA ), a break below could take the pair towards 1.3076 (50% fib)

 USD/JPY: The dollar surged to a 24-year peak against the yen as Japan's dovish monetary policy   contrasted with a relatively stronger U.S. economy and a hawkish Federal Reserve. Japan's Chief Cabinet Secretary Hirokazu Matsuno told a news briefing that the administration would like to take necessary steps if  rapid, one-sided  moves in currency markets continue, ratcheting up the rhetoric.  The U.S. currency soared as high as 144.99 yen , hitting the level for the first time since August 1998. It is now within a large leap of its 1998 high of 147.43. The dollar was last up 0.9% at 144.26 yen. Since the beginning of August, the yen has plummeted by 10.1% against the dollar. Strong resistance can be seen at 145.94(23.6%fib), an upside break can trigger rise towards 146.06(Higher BB).On the downside, immediate support is seen at 144.08(38.2%fib), a break below could take the pair towards 142.24(50%fib).

Equities Recap

The major European markets closed on a mixed note on Wednesday with investors largely staying wary of picking up stocks amid rising fears of a recession after disappointing data from the euro area and China.

The UK's benchmark FTSE 100 closed down by 0.86 percent, Germany's Dax ended up  by 0.35 percent, and France’s CAC finished the day up by 0.02 percent.

U.S. stock indexes climbed the most in roughly a month as bond yields eased, with investors shrugging off hawkish remarks made by Federal Reserve officials on Wednesday.

Dow Jones closed up at 1.38 percent, S&P 500 ended up  1.66 percent, Nasdaq finished the day up by 2.14 percent.

Treasury Recap

Benchmark U.S. Treasury yields tumbled on Wednesday after earlier hitting three-month highs, as demand for dollars helped send money into the government debt and before Federal Reserve Chair Jerome Powell will speak on Thursday.

Benchmark 10-year note yields were last 3.267%, after earlier reaching 3.365%, the highest since June 16.   Two-year yields were last 3.450% and are holding below the 3.551% level hit on Thursday, which was the highest since November 2007.

Commodities Recap

Gold bounced back on Wednesday helped by the dollar’s slight retreat from a two-decade high and as bargain hunters took advantage of recent losses, but the precious metal’s outlook was still clouded by prospects of aggressive rate hikes.

Spot gold rose 0.9% to $1,716.59 per ounce by 2:02 p.m. ET (1801 GMT). U.S. gold futures settled 0.9% higher at $1,727.80.

Oil prices settled sharply lower on Wednesday, slumping below levels seen prior to Russia's invasion of Ukraine as downbeat Chinese trade data fed investor worries about recession risks.

Brent crude futures settled down $4.83 to $88 a barrel, falling below $90 a barrel for the first since Feb. 8. U.S. West Texas Intermediate crude settled down by $4.94, or 5.7%, to $81.94, its lowest since January.

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