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Sep 05 - 04:55 PM

EUR/USD - COMMENT-US Recap: EUR/USD Down As Dollar Catches Safe-Haven Bid

By Paul Spirgel  —  Sep 05 - 02:45 PM

The dollar index gained 0.6% as traders returned from the Labor Day holiday weekend in a safe-haven mood, buying dollars after China Caixin services PMI disappointed and euro zone PMI added pressure to the reduced global growth outlook.

EUR/USD fell 0.63% as the reduced European growth outlook raised doubts the ECB would raise rates at its upcoming Governing Council meeting on Sept.
EUR/USD hit a 3-month low at 1.0705, bouncing slightly to 1.0730 in the NorAm afternoon.
EUR bears now target the June 2 weekly low at 1.0635 and then late-February lows sub-1.0550.

USD/JPY climbed to a new 2023 high at 147.76 and holding near there in late trade, the yen remaining under considerable pressure as U.S.-Japan yield differentials continue to widen.
The yen is offered with abandon as the BoJ clings to its uber-accommodative rate tack, while Fed expectations remain in the higher for longer.
Traders have also appear to have pushed back Japanese government intervention expectations to 150, a touch below the 2022 high at 151.94.

GBP/USD was down 0.47%, sterling weakness lagging slightly as UK PMI data beat forecasts, hinting that any UK economic malaise due to rising UK rates may not be as bad as feared.

With the BoE expected to keep hiking rates, and keeping rates well above other developed market central banks, GBP/USD may be nearing its nadir, assuming the BoE remains relatively hawkish.

AUD/USD was hit hardest of the majors, falling to a session low at 0.6358, before heading toward the NorAm close -1.32% at 0.6380.
Falling China PMIs hint that weak China growth is likely to temper Australian growth.

Rising UST yields hit gold, which fell 0.6% to 1,926.
Bitcoin, also sensitive to rising global yields, fell 0.3% to $25.7k after trading in a $25.9k-$25.5k range.

Australia Q2 Real GDP in the upcoming Asia session will be a focus for hints at RBA policy.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary


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