The safe-haven Japanese yen and U.S. dollar remained firm on Wednesday while riskier currencies like sterling and the Aussie dollar languished as investors ran for safety following the worst sell-off in almost a month on Wall Street. PMI data
The JOLTS report on job openings will be a key focus today as the FX market remains highly sensitive to all things employment after Fed Chair Jerome Powell focused on the labor market in his Jackson Hole speech last month. Factory orders and international trade are also due.
Global Economic Indicators:
US PMI: Overall manufacturing PMI came in at a disappointing 47.2, below the Reuters consensus forecast of 47.5 and still in contraction territory, though above 46.8 registered in August.
Chile’s Central Bank: Chile’s central bank cut its benchmark interest rate by 25 basis points to 5.5% on Tuesday, in line with traders’ expectations and following a unanimous vote. The Andean country’s rate cut brings the rate down 575 basis points from a high of 11.25% in July 2023. On a year-on-year basis, second quarter gross domestic product (GDP) was confirmed at 0.9%.
Commodity Update
Gold: Gold prices eased to their lowest in more than a week, pressured by a firm dollar, while investors awaited U.S. non-farm payrolls data that could determine the size of the potential cut in the Federal Reserve’s September policy meeting.
Crude Oil: Oil prices settled nearly 5% down at their lowest levels in nearly nine months on signs of a deal to resolve a dispute that has halted Libyan crude production and exports.
Copper – Copper fell 2.94%, hitting its lowest since Aug. 14 during the session, driven down by concerns that a weak Chinese economy is curbing demand in the world’s biggest metals consumer.
Yesterday’s price action MCX gold futures settled -0.31% to71381.Silver settled-1.54% to 83252. Copper settled -2.00% to 785.35. Crude oil -4.93% at 5915. Natural gas +0.11% to 184.80
Major Economic Data and Event scheduled today And possible impact on the currency
China
At 7.15am –
Caixin Services PMI. Data is foreseen at 51.9 from the previous 52.10.
Above data could have a mixed impact on the Yuan.
Eurozone
At 12.45pm – Spanish Services PMI. Data is foreseen at 54.8 from previous 53.90
At 1.15pm – Italian Services PMI. Data is foreseen at 52.50 from previous 51.70.
At 1.20pm- French Final Services PMI. Data is foreseen at 55.00 from previous 55.00.
At 1.25pm- German Final Services PMI. Data is foreseen at 51.4 from previous 51.4
At 1.30pm- Final Services PMI. Data is foreseen at 53.30 from previous 53.30.
At 2.30pm- PPI m/m. Data is foreseen at 0.3% from previous 0.5%.
Above data could have a volatile impact on the Euro.
UK
At 7.00am- Final Services PMI. Data is foreseen at 53.30 from previous 53.30.
Above data could have a neutral impact on the Pound.
Canada
At 6.00pm- Trade Balance. Data is foreseen at 0.7B from the previous 0.6B.
At 7.15pm-BOC Rate Statement. Overnight Rate (Expect 4.25% from 4.50%)
At 8.00pm- BOC Press Conference.
Above data and events could have a volatile impact on the dollar.
US
At 6.00pm- Trade Balance. Data is foreseen at -78.8B from the previous -73.1B.
At 7.30pm-
JOLTS Job Openings. Data is foreseen at 8.09M from the previous 8.18M
Factory Orders m/m. Data is foreseen at 4.7% from the previous -3.3%.
All day – Wards Total Vehicle Sales. Data is foreseen at 15.4M from previous 15.8M.
At 11.30pm- Beige Book.
Above data could have a volatile impact on the dollar.
Happy trading!
Commodity Samachar Securities
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