FOMC Minutes, RBI Policy: Key Drivers for Dollar & Markets
Dollar Index:
The dollar drifted sideways on Wednesday, given some relief to the yen and other major currencies after a sharp rally to a seven-week high last week, as investors paused to assess the interest rate path outlook for the United States.
The New Zealand dollar slumped to its lowest since Aug. 19 at $0.6096, after the Reserve Bank of New Zealand (RBNZ) cut interest rates by 50 basis points.
Later today, investors will get minutes of the Fed’s September meeting, which will show discussions about what at the time had appeared to be a deteriorating labour market that ended with all but one policymaker agreeing to a 50-basis point cut.
Crude Oil:
Oil prices dropped down more than 4% on news of a possible ceasefire between Hezbollah and Israel, although prices found some support on fears of a potential attack on Iranian oil infrastructure. On Monday, Brent rose above $80 per barrel for the first time since August after more than a 3% daily gain. That followed the largest weekly gain in over a year, roughly 8%, in the week to Friday on rising concerns of a spreading war in the Middle East.
Gold:
Gold prices extended their decline to the fifth consecutive session under pressure from recent strong U.S. economic data, though safe-haven demand coming from tensions in the Middle East limited the drop. Gold prices, up 28% so far this year, have been under pressure since Friday’s strong U.S. jobs report prompted markets to adjust estimates of the depth of future U.S. rate cuts.
Copper:
Copper prices fell on Tuesday to their lowest in two weeks, after top metal consumer China failed to convince investors on how its stimulus would get the economy back on track. Three-month copper on the London Metal Exchange CMCU3 fell earlier to $9,700 per metric ton, the lowest level since Sept. 24. It last traded 1.8% lower at $9,745 a ton as at 1026 GMT.
Prices action (MCX)
Gold 75161 (-1.16%), Silver 88729 (-3.93%), Copper 834.95(-2.21%) Crude Oil 6481 (-3.57%) Natural gas 231.60(0.70%)
Yesterday Data and Event Update –
The United States’ trade balance for the reporting period has been released, showing a decrease in the deficit to $70.4 billion vs $70.1 billion forecast . This figure, while a significant improvement from the previous period, fell slightly short of economists’ expectations.
German industrial production rose by a larger than expected 2.9%vs 0.8% in August from the previous month thanks to an increase in automotive industry output, the federal statistics office said on Tuesday.
Major Economic Data and Event scheduled today (FOMC minutes, RBI policy) Key Drivers for Dollar & Markets
New Zealand
At 6.30am-
RBNZ Official Cash Rate. Expect 4.75% from previous 5.25%.
RBNZ Rate Statement
Above data could have a negative impact on the dollar.
Japan
At 11.30am- Prelim Machine Tool Orders y/y. Previous was at -3.5%
Above data could have a Neutral impact on the Yen.
Eurozone
At 11.30pm— German Trade Balance. Data is foreseen at 18.9B from previous 16.8B
Above data could have a neutral impact on the Euro.
US
At 5.30pm – FOMC Member Bostic Speaks.
At 6.45pm- FOMC Member Logan Speaks.
At 7.30pm- Final Wholesale Inventories m/m. Data is foreseen at 0.2% from previous 0.2%.
At 8.00pm- Crude Oil Inventories
At 8.00pm- FOMC Member Goolsbee Speaks
At 10.00pm- FOMC Member Jefferson Speaks
At 11.30pm- FOMC Meeting Minutes
Above data could have a volatile impact on the dollar.
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