Market News
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Chinese Yuan: Policy support eyed as growth slows – Commerzbank
Commerzbank’s Charlie Lay, Dr. Henry Hao and Moses Lim note that China’s July data showed weaker Industrial Production and Retail Sales, underscoring fading momentum at the start of Q3.
Euro rises to June highs as falling US Treasury yields weigh on US Dollar
EUR/USD climbs sharply on Wednesday, reaching its highest level since June as the US Dollar (USD) comes under fresh selling pressure following the US Treasury’s announcement that it will increase buybacks of longer-dated government debt.
Australian Dollar: Shallow uptrend risk into next year – Rabobank
Rabobank’s Senior FX Strategist Jane Foley notes AUD/USD is currently on the back foot, with the Australian Dollar the weakest G10 currency on a one-day view. Despite market doubts, Rabobank still expects one more Reserve Bank of Australia (RBA) rate hike this year.
Indonesian Rupiah: Stability-focused BI stance – UOB
UOB economist Enrico Tanuwidjaja notes that Bank Indonesia (BI) kept the BI Rate at 5.75% in August, prioritizing Rupiah and macro-financial stability over growth.
US Treasury doubles some long-dated debt buybacks to support liquidity
The United States (US) Department of the Treasury (US Treasury) announced on Wednesday that it will double the size of some of its buyback operations aimed at supporting liquidity in the longer-dated Treasury securities market.
United Kingdom: Constrained backdrop and BoE risks – Societe Generale
Societe Generale’s Sam Cartwright argues that a new UK Prime Minister has not altered the constrained fiscal backdrop, limiting ambitions on housebuilding, social care, investment and defence.
China: Policy support and structural shifts – HSBC
HSBC strategists review July data and the latest China Politburo guidance. Retail sales and Fixed Asset Investment softened, while Industrial Production and exports were supported by AI-related and green technology demand.
Euro: Domestic demand resilience supports EUR – BNY
BNY’s Geoff Yu highlights European Central Bank (ECB) President Christine Lagarde’s warning that Europe’s post-war growth model is eroding as global trade fragments and cheap energy fades.
Canada: EU protectionist shift challenges diversification – NBC
National Bank of Canada’s (NBC) Angelo Katsoras argues that Canada’s push to diversify exports away from the United States (US) toward the European Union (EU) faces growing obstacles as EU industrial policy turns more protectionist.
Japanese Yen gains as US Dollar retreats ahead of FOMC Minutes
USD/JPY edges lower on Wednesday as the US Dollar (USD) loses momentum and retreats toward the June lows touched earlier this week. At the time of writing, the pair trades around 159.10, down 0.32% on the day.
US Dollar: Fed minutes watched as rate doubts grow – Commerzbank
Commerzbank’s Antje Praefcke says markets will scrutinize the latest Fed minutes for clues on how close policymakers remain to another rate hike after weaker US labour and inflation data reduced expectations for a hike by year-end.
Indonesian Rupiah: Policy continuity supports currency – Societe Generale
Societe Generale analysts Galvin Chia and Kunal Kundu note that Bank Indonesia kept the BI rate at 5.75%, with deposit and lending facility rates unchanged, reinforcing Rupiah stability and inflation control.
Gold Price Forecast: XAU/USD bounces to $4,370, but upside momentum is fading
Gold (XAU/USD) trades moderately higher on Wednesday and returns to the $4,370 area, after finding buyers near the $4,300 area on Tuesday.