United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann note that USD/CNH remains confined to a tight intraday range, with momentum indicators still flat and the pair expected to trade between 6.7400 and 6.7500.
Two cooling inflation readings carried the broad market to a record on Thursday, taking the S&P 500 through 7,800 for the first time, and Friday morning supplied the explanation for where the cooling came from.
NZD/USD gains 0.75% on Friday and trades around 0.5895 at the time of writing, with its rally losing some momentum as it approaches the psychological 0.5900 level.
Commerzbank’s Norman Liebke stresses that European natural gas remains structurally tighter than Oil as Qatar LNG is cut off and US cargoes are redirected to Asia.
Silver (XAG/USD) trades on the front foot on Friday but lacks strong follow-through and remains within the narrow range seen this week. At the time of writing, XAG/USD trades around $65 after bouncing from an intraday low of $63.51.
Scotiabank strategists Shaun Osborne and Eric Theoret report EUR/USD trading in the mid-1.15s with modest gains versus the US Dollar (USD), supported by euro area Gross Domestic Product (GDP) and a return to trade surplus.
EUR/GBP has traded in a tight range around the mid-0.8500s on Friday, little changed on the day. The latest Eurozone figures came in close to forecasts, and they did nothing to push the pair out of the range it has held all week.
MUFG analysts focus on several ASEAN indicators for regional currencies. They flag Singapore’s July non-oil domestic exports after June’s strong 20.7% year-on-year rise, and expect Malaysia’s CPI to stay contained at 1.9% year-on-year.
TD Securities’ Robert Both expects Canadian headline CPI to rise to 2.9% year-on-year in July, driven by higher gasoline and food prices, while ex. food/energy components stay muted.
ING’s Lynn Song expects Bank Indonesia to keep its benchmark rate unchanged at 5.75% this week, prioritizing Rupiah stability while avoiding an immediate hike. The report highlights BI’s growing reliance on non-rate tools such as SRBI yields and FX intervention.
The Pound Sterling (GBP) rises by some 0.40% on Friday as a batch of US data supports a Federal Reserve (Fed) dovish stance, with consumer sentiment deteriorating while the disinflation process showed further progress.
Scotiabank strategists Shaun Osborne and Eric Theoret observe USD/JPY trading near 159, with modest Japanese Yen (JPY) gains offering reassurance to the Ministry of Finance (MoF) after recent weakness.
Commerzbank’s Barbara Lambrecht observes that despite falling LME Copper stocks and trimmed output guidance from a major producer, the recent Copper rally is losing momentum.
Nordea strategists see the Norwegian Krone (NOK) broadly stable over the next six months after July’s EUR/NOK decline, driven by higher Oil prices and Norges Bank’s increased NOK purchases.
MUFG analysts Lin Li, Michael Wan, Lloyd Chan and Khang Sek Lee note that upcoming US economic data will be crucial for the US Dollar outlook.
EUR/JPY rises 0.15% on Friday and trades around 184.15 at the time of writing. The pair remains supported despite growing expectations that Japan could raise interest rates as soon as September, while investors also anticipate further monetary tightening in the Eurozone.
Scotiabank strategists Shaun Osborne and Eric Theoret highlight Canadian Dollar (CAD) strength as USD/CAD trades just below their fair value estimate around 1.3895, supported by tighter US–Canada 2-year spreads and firmer commodity FX.
ING’s Lynn Song expects China’s July data to show continued sluggish momentum, with only a modest rebound and weak Retail Sales at 1.7% year-on-year. Fixed Asset Investment is forecast to contract further, while Industrial Production remains relatively firm.
EUR/USD rallies on Friday, erasing all the losses recorded earlier this week as broad-based weakness in the US Dollar (USD) lifts the Euro (EUR). At the time of writing, the pair trades around 1.1580 near its highest level since June 17.
Commerzbank’s Carsten Fritsch notes Gold has rallied to its highest level since early June as markets scale back expectations for further Fed rate hikes.
Nordea analysts Ole Håkon Eek-Nielsen and Jan von Gerich argue that the Federal Reserve is likely to deliver three more rate hikes over coming quarters to bring inflation back to target.
TD Securities’ Julie Ioffe expects UK headline CPI to rise to 2.9% year-on-year in July, largely due to the Ofgem energy price cap adjustment. Services inflation is forecast to ease to 3.4%, while core goods rise to 1.0%, keeping core CPI at 2.6%.
The Canadian Dollar (CAD) is among the best performers on Friday, trading near a fresh two-month low against the US Dollar (USD) near the 1.3860s mark. The move coincides with a weak US Retail Sales report that pulled the Greenback lower across the board, but it preceded that data release.
ING highlights that market consensus sees Japan’s preliminary Q2 Gross Domestic Product (GDP) holding at 0.5% quarter-on-quarter, with Private Consumption remaining the main growth driver.
Commerzbank’s Norman Liebke highlights that Oil and European natural gas are reacting differently to Middle East supply risks, with Brent supported by rerouted flows while gas remains constrained by lost LNG from Qatar and US cargoes diverted to Asia.
Nordea strategists argue that while near-term risks for the Dollar are broadly balanced, the longer-term outlook remains negative.
Royal Bank of Canada (RBC) economist Claire Fan highlights that Canadian growth rebounded strongly in Q2, supported by resilient domestic demand and improving net trade. She notes that U.S.
USD/JPY trades on the back foot on Friday, pressured by a weaker US Dollar (USD), while the Japanese Yen (JPY) draws support from a more hawkish Bank of Japan (BoJ) outlook. At the time of writing, the pair trades around 158.85, down 0.40% on the day.
Gold (XAU/USD) rebounds on Friday after opening the day in negative territory and falling to a fresh weekly low of $4,311.
The preliminary University of Michigan Consumer Sentiment Index dipped in August to 51 from 55.2 in the previous month, missing economists’ expectations (54.5) and signalling extra weaknening in public confidence.
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