Morning Market Review

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09/24/2021

EUR/USD

EUR shows mixed trading dynamics against USD during the Asian session, consolidating after a significant increase the day before, when EUR managed to retreat from its local lows since August 20. The development of the upward dynamics for the instrument was largely facilitated by technical factors, while the fundamental picture changed insignificantly. In addition, a rather weak statistics on business activity in the US put pressure on USD yesterday. However, the European data was not much better. Markit Manufacturing PMI in Germany in September fell from 62.6 to 58.5 points, while forecasts suggested a decrease in the indicator to 61.5 points. A similar indicator in the services sector fell from 60.8 to 56 points, which also turned out to be worse than market expectations at 60.2 points. The Composite PMI in September fell from 60 to 55.3 points against the forecast at 59.2 points. Investors are now focusing on the IFO Business Optimism report in Germany for September.

GBP/USD

GBP is trading with mixed dynamics against USD during the Asian session, consolidating near its local highs since September 17, updated the day before. In addition to weak statistics on USD, the growth of the instrument was facilitated by the results of the meeting of the Bank of England on the interest rate. As expected, the British regulator did not change the parameters of monetary policy. Nevertheless, only 7 out of 9 board members voted for the preservation of the volume of the quantitative easing program, which indicates that the Bank of England is following the European Central Bank (ECB), the US Federal Reserve and some other world regulators. However, there are still enough problems in the British economy. The inflation rate is not so significant as to exert substantial pressure, but the labor market remains unloaded. Domestic demand also remains low, which is expressed through a drop in consumer confidence indices. In September, Gfk index fell from –8 to –13 points, while analysts hoped for a slight improvement to –7 points.

NZD/USD

NZD has been flat against USD during the morning session, consolidating near 0.7060. The day before, the instrument showed a steady growth, which was due to technical factors and the publication of not very successful macroeconomic statistics from the US. Markit Manufacturing PMI in September fell from 61.1 to 60.5 points, while forecasts suggested an increase in the indicator to 61.5 points. The Services PMI also showed negative dynamics, falling from 55.1 to 54.4 points against the forecast at 55 points. The statistics on the dynamics of jobless claims were also disappointing. The number of Initial Jobless Claims increased from 335K to 351K, while forecasts assumed a decrease to 320K. The further growth of the instrument is hindered today by ambiguous statistics from New Zealand. The volume of exports from New Zealand in August fell from USD 5.77B to 4.351B, which led to an increase in the trade deficit from USD –1.099B to –2.944B.

USD/JPY

USD has seen moderate gains against JPY during Asian morning trading, hitting local highs since August 13. USD is preparing to end the current week with rather active growth, despite the fact that the "bullish" momentum, which was formed on Wednesday after the publication of the US Federal Reserve's minutes, is weakening amid the release of ambiguous macroeconomic statistics. The day before, investors reacted negatively to yet another rise in the number of jobless claims and a further decline in business activity as the pace of US economic recovery slowed down. Nevertheless, expectations of the curtailment of the current stimulus from the US Federal Reserve provide significant support to USD. As for JPY, it is left to be content with little. The Bank of Japan is taking a firm wait-and-see attitude, and tightening of monetary policy in the near future is out of the question.

XAU/USD

Gold prices are recovering during the Asian session on Friday, retreating from the local lows since August 11, updated during the sharp decline the day before. A noticeable pressure on the instrument's positions on Thursday was exerted by the growth in the yield of US government bonds, which, together with expectations of a tightening of monetary policy by the US Federal Reserve, increased investor interest in risk. In addition, the market has calmed down a bit about a possible default of the Chinese developer Evergrande Group, as the company managed to negotiate with some of its creditors and the People's Bank of China added a lot of liquidity to the country's financial system. Noteworthy macroeconomic statistics are not expected today, so corrective sentiments may persist until the end of the trading session.

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