EUR/USD 1.16625
0.136%
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0.102%
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0.005%
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0.166%
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On October 16th, gold prices hit a new high of $4,226 in early trading, supported by concerns about trade tensions and market bets that the Federal Reserve will increase monetary easing before the end of the year. So far this week, gold prices have risen by over 5%, and the buying frenzy has also spread to other precious metals. Traders are heavily betting on at least one significant US interest rate cut before the end of the year, and Fed Chairman Powell hinted this week that the central bank will cut rates by another 25 basis points later this month. The ongoing US government shutdown also provided support for gold prices. Furthermore, the so-called "currency devaluation trade" is driving inflows into gold, with investors selling sovereign debt and currencies to hedge against the risks of widening fiscal deficits. Active gold purchases by central banks are a key support. Saad Rahim, chief economist at Trafigura Group, said that the gold rally is "primarily driven by physical buying. If you look at central banks, they are buying heavily."South Koreas chief presidential policy adviser expressed "optimism" when asked about US tariff negotiations.Honda Motor: Will make additional investment in California-based startup Helm.AI.ANZ Bank raised its gold price forecast to $4,400 an ounce by the end of this year, and expects it to peak at nearly $4,600 an ounce by June 2026.On October 16, the World Meteorological Organization (WMO) announced that atmospheric concentrations of carbon dioxide, methane, and nitrous oxide reached record highs in 2024. This phenomenon is attributed to continued human emissions of carbon dioxide and the frequent occurrence of wildfires. This, combined with the reduced absorption of carbon dioxide by carbon sinks such as terrestrial ecosystems and the oceans, could lead to a vicious cycle of climate change. WMO officials stated that the last time such high carbon dioxide concentrations were recorded in Earths history was approximately 3 to 5 million years ago, before the advent of humans.

Bulls in EUR / USD Have Taken Out Significant Lows, Dropping Below 1.0570 So Far

Alina Haynes

Mar 01, 2023 11:51

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On Tuesday, the EUR / USD exchange rate hit a bottom of 1.0573, but that was not the only development. Early in the day, higher-than-expected French inflation figures drew investors to the Euro, driving short-term euro zone yields to their greatest levels in at least a decade. Then, at the start of the US trading session, the pair increased to 1.0645 as US data showed that, in contrast to several prior inflationary results, the Fed's rate rises were starting to have the intended impact.

 

According to ANZ Bank analysts, "Base effects from Russia's invasion of Ukraine last year should start to push annual inflation down from March, but the ECB will be mainly worried with consecutive monthly inflation rises." Inflation statistics for Germany and the euro zone will be released soon, giving the Governing Council meeting in March a more comprehensive inflation picture.

 

Unexpectedly, the US Consumer Sentiment dropped in February, dropping from 106 in January to 102.9, far below the anticipated 108.5. The US Dollar suffered as a result. In addition, the Chicago PMI business poll for February came in lower than expected, and the S&P CoreLogic Case Shiller national house price index rose only 5.8% year over year and dropped 0.5% in December.

 

Expectations regarding the Fed's interest rate policy will be heavily influenced by the US Nonfarm Payrolls employment statistics for February, which will be published on March 10, and the Consumer Price Index, which will be released on March 14. The ISM manufacturing PMI will likely continue to represent the sector's fragility in February (market expectation: 45.5), according to analysts at Westpac, and the final assessment of the S&P Global manufacturing PMI will probably support this as well. "Weaker demand is expected to keep construction spending down in January (market consensus: 0.2%);" Neel Kashkari, president of the Minneapolis Federal Reserve, will also speak.


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