Market Roundup
• Japan Jul CPI, n.s.a (MoM) 0.4%, 0.3% previous
• Japan Jul National Core CPI (YoY) 2.7%,2.7% forecast, 2.6% previous
• Japan Jul National CPI (YoY) 2.8%,2.8% previous
• Japan Jul National CPI (MoM) 0.2%,0.3% previous
Looking Ahead Economic Data (GMT)
• 06:00 Sweden Jul Unemployment Rate 9.4% previous
• 06:00 French Aug Business Survey 96 forecast, 95 previous
Looking Ahead Events And Other Releases (GMT)
• 12:00 Jackson Hole Symposium
Currency Forecast
EUR/USD: The euro strengthened against the dollar on Friday, but gains were limited as investors remained cautious ahead of a highly anticipated speech by the Federal Reserve Chair. Market participants are seeking confirmation that U.S. rate cuts will commence in September. Fed policymakers have shown support for initiating rate cuts next month due to easing inflation and a cooling labor market, one official has indicated a cautious approach to policy adjustments. Traders have largely priced in a rate cut next month, with the CME FedWatch tool indicating a 76% probability of a 25-basis-point reduction. The euro was last trading at $1.1119, close to the 13-month high it reached on Wednesday. Immediate resistance can be seen at 1.1175(23.6%fib), an upside break can trigger rise towards 1.1200(Higher BB).On the downside, immediate support is seen at 1.1098(38.2%fib), a break below could take the pair towards 1.1070 (Aug 20th low).
GBP/USD: The British pound strengthened on Friday, bolstered by British business activity data that indicated steady growth momentum for the second half of 2024. The preliminary flash estimate of the UK's S&P Global Composite PMI increased to 53.4 in August, up from 52.8 in July, marking the highest level since April and surpassing the median forecast of 52.9 from economists. Readings above 50 signal growth, and S&P Global noted that these figures suggest the economy is expanding at a quarterly rate of 0.3%. As of 04:34 GMT, the pound was trading 0.15% higher at $1.3107, having reached $1.3113, its highest level since July 2023.Immediate resistance can be seen at 1.3107(23.6%fib), an upside break can trigger rise towards 1.3128(Higher BB).On the downside, immediate support is seen at 1.3006(38.2%fib), a break below could take the pair towards 1.2936(50%fib).
AUD/USD : The Australian dollar strengthened against dollar on Friday as upbeat surveys of global service sectors supported risk sentiment. Looking ahead, traders are awaiting potential cues from Federal Reserve Chair Jerome Powell regarding the timing and magnitude of interest rate cuts. In his speech at Jackson Hole later today, Powell is expected to emphasize that rate cuts are forthcoming. His previous remarks at Jackson Hole have often offered insights into future rate movements. The Australian dollar steadied at $0.6712, having pulled back from a recent high of $0.6760. It remains 0.7% higher for the week, marking its third consecutive week of gains. Immediate resistance can be seen at 0.6780 (23.6%fib), an upside break can trigger rise towards 0.6792(Higher BB).On the downside, immediate support is seen at 0.6720 (Aug 20th low), a break below could take the pair towards 0.6692 (38.2%fib).
USD/CNY:China's yuan held steady against the dollar on Friday and was set to secure its fifth consecutive weekly gain, marking its longest winning streak in over three years. The currency was supported by heightened corporate interest in converting foreign exchange receipts due to recent dollar weakness. However, gains were tempered by market caution ahead of Federal Reserve Chair Jerome Powell’s speech in Jackson Hole, Wyoming, later in the day. Powell's remarks are expected to offer further insights into the monetary policy direction of the world's largest economy. As of 04:24 GMT, the yuan was trading at 7.137 to the dollar.Strong resistance can be seen at 7.156 (38.2 %fib), an upside break can trigger rise towards 7.178 (50 %fib). On the downside, immediate support is seen at 7.127 (23.6 %fib), a break below could take the pair towards 7.117 (Aug 5th low).
USD/JPY: The dollar fell against the yen on Friday after Bank of Japan Governor Kazuo Ueda's comments boosted the Japanese currency. In his testimony to the Diet, Ueda affirmed that the BOJ intends to maintain its hawkish policy stance. He suggested that further monetary tightening could be on the horizon if the bank's growth and inflation projections are met, potentially leading to additional rate hikes by year-end. Given Japan's robust economic performance and persistent inflation, many analysts anticipate that the BOJ might implement another rate increase before the year concludes. At GMT 04:40 ,dollar slipped 0.33% to 145.77 against the yen.Strong resistance can be seen at 146.45(50 %fib), an upside break can trigger rise towards 147.36(Aug 20th high). On the downside, immediate support is seen at 145.23(38.2 %fib), a break below could take the pair towards 144.00(Psychological level).
Equities Recap
Japan's Nikkei share average reversed early gains on Friday to close the morning session lower
The Nikkei was down 0.24% to 38,117.44 after gaining as much as 0.42% earlier in the day.
China stocks climbed on Friday, recovering from three straight days of losses. Meanwhile, Hong Kong shares fell
China's blue-chip CSI300 index rose by 0.57%, while the Hang Seng Index fell by 0.41% to 17,569.38.
Commodities Recap
Gold prices edged higher on Friday but were on track for a weekly decline after retreating from record highs.
Spot gold was up 0.2% to $2,488.74 per ounce by 0257 GMT and U.S. gold futures gained 0.3% to $2,524.30.
Oil prices remained largely unchanged on Friday and were set to close the week lower. Downward revisions to U.S. employment data raised concerns about demand, while renewed ceasefire talks in Gaza alleviated fears of supply disruptions.
Brent futures, which have decreased by approximately 3% this week, were at $77.32 per barrel, while WTI, down nearly 5%, stood at $73.11.
