Market Update - 26 May 2023
GBP/USD has rebounded firmly from 1.2320 amid hopes of a pause in the policy-tightening spell by the Fed. The deviation in proposed budget spending by the White House to Republican leaders has narrowed to $70 billion from original proposal of $1 trillion. A rebound in retail demand could fuel inflationary pressures and create more troubles for the BoE. (FXStreet)
AUD/USD renews intraday top as it reverses from the yearly low, snaps three-day downtrend. Australia Retail Sales’ growth stagnates in April versus 0.4% prior. US Dollar bulls step back from key resistance line amid mixed concerns about debt ceiling, unimpressive Fed talks. US Durable Goods Orders, Fed’s preferred inflation gauge eyed, US default updates are critical. (FXStreet)
EUR/USD has jumped to near 1.0740 as the USD Index has extended correction. Tight credit conditions by US regional banks are effectively weighing on US inflationary pressures. The ECB is anticipated ECB to raise interest rates further despite the German recession. (FXStreet)
NZD/USD has turned sideways around 0.6060 posts a soft recovery ahead of US Durable Goods Orders. Fed policymakers are anticipated to capitalize on tight credit conditions to weigh pressure on inflation rather than hiking interest rates further. RBNZ Silk advised holding rates ahead and remaining data-specific. (FXStreet)
GBP/JPY has recovered sharply and has climbed to near 172.50 after the release of mixed UK Retail Sales. Monthly UK Retail Sales have expanded sharply, portraying resilience in the households’ demand. BoJ Ueda is considering options for tweaking YCC. (FXStreet)
The index gives away some loses following recent peaks. Policy makers move closer to a deal in the debt ceiling. US inflation tracked by the PCE takes centre stage later on Friday. The USD Index (DXY), which measures the greenback vs. a basket of its main rival currencies, recedes from recent multi-week peaks near the 104.30 region. (FXStreet)
USD/JPY retreats from the YTD peak amid a modest USD pullback from over a two-month high. A softer risk tone benefits the safe-haven JPY and further contributes to the intraday downfall. The Fed-BoJ policy divergence should help limit losses ahead of the US Core PCE Price Index. (FXStreet)
USD/CAD renews intraday low, prints the first daily loss in three around monthly top. Key resistance line prods Loonie pair bulls but oscillators, previous run-up suggest the quote’s further advances. Convergence of 50-DMA, three-week-long rising trend line challenges bears. (FXStreet)
USD/CNH takes offers to refresh intraday low while reversing from the highest levels since December 2022. China’s state banks allegedly selling US Dollar in onshore FX markets to defend Yuan. Market’s consolidation ahead of the US data, events join fears of more PBOC intervention to weigh on USD/CNH price. (FXStreet)
USD/ZAR retreats from all-time high to pare the biggest daily gains in a year amid overbought RSI. 18-month-old rising trend channel keeps South African Rand sellers hopeful. Previous resistance from March restricts immediate downside ahead of 10-DMA.
WTI crude oil consolidates the biggest daily loss in three weeks. Mixed sentiment about US debt ceiling deal, Oil demand-supply concerns prod energy traders. Cautious mood ahead of the key data/events also restricts immediate WTI moves. US data, OPEC+ meeting eyed for directions, US debt ceiling updates are key. (FXStreet)
Gold price defends 100-day SMA and rebounds from over a two-month low touched on Friday. A modest US Dollar profit-taking slide is seen as a key factor lending support to the XAU/USD. Hawkish Federal Reserve expectations might cap the upside ahead of the US PCE Price Index. (FXStreet)
Silver price has fit above $23.00 amid a sheer decline in the USD Index. White House officials and Speaker McCarthy-led team are vigorously involved in negotiations for raising the US debt-ceiling. Silver price has shown a decent recovery and has climbed back above the 50% Fibo retracement at $23.00. (FXStreet)
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