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AUD/USD appears oversold below 0.65 relative to where Asian currencies and commodity prices are, DBS’ Senior FX Strategist Philip Wee notes. RBA to issue minutes for the November 5 meeting “We expect no surprises in tomorrow’s Reserve Bank of Australia minutes for the November 5 meeting. Last Friday, RBA Governor Michele Bullock confirmed it would be some time before inflation returns sustainably to the 2-3% target.” “Although CPI inflation fell to 2.1% YoY in September, trimmed mean inflation remained high at 3.2%. The unemployment rate was unchanged at 4.1% for a third month in October after peaking at 4.2%. The futures market sees the RBA delaying rate cuts to 2Q25.”

GBP/USD has a trendline support level of around 1.2570, DBS’ Senior FX Strategist Philip Wee notes. Bailey to reaffirm BoE’s gradual approach on policy “Appearing before the Parliament’s Treasury Committee on November 19, Bank of England Governor Andrew Bailey and his colleagues will likely reaffirm their gradual approach to removing monetary policy restraint. Having lowered the bank rate by 25 bps in August and November, the OIS sees quarterly rate cuts to 4.25% by mid-2025.” “Following the Chancellor’s budget announcement on October 31, the BOE forecasted inflation rising and staying above the 2% target until 2027, based on its assumption for rates to decline to 3.7% by 4Q25.” “On November 20, UK CPI inflation should rebound to 2.2% YoY (0.5% MoM) in October from 1.7% YoY (0% MoM) in September. While CPI core inflation is expected to moderate to 3.1% YoY from 3.2%, it remains above the 2% target.”

The Dollar Index (DXY) rebounded by 5.9% to 106.7 in the past 1.5 months, following its 4.8% decline to 100.8 in 3Q24, DBS’ Senior FX Strategist Philip Wee notes. Trump Trade may lose momentum “The 107.3 high in October 2023 will be a significant resistance level, and DXY may correct lower if the Trump Trade loses momentum. The rallies in the S&P 500 Index and Bitcoin stalled around 6k and 90k, respectively, last week.” “The Atlanta Fed GDPNow model projected US GDP growth slowing to 2.5% in 4Q24 from 2.8% in 3Q24. The US Treasury 2Y yield entered a 4.24-4.37% range last week. Since Trump’s victory, the futures market has reduced the odds of a December Fed cut to 58% from 80%.” “On November 21, let’s see if Fed Governor Michelle Bowman joins her colleague’s optimism for inflation to return to the 2% target and rates to decline further towards neutral in 2025. Bowman dissented September’s 50 bps cut but supported November’s 25 bps cut.”

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Mexican Peso trades slightly lower on Monday after a mild recovery. The Peso gained as the effect of the Trump-trade wore off, Banxico upgraded its forecasts, and Mexico made a budget announcement. USD/MXN could be starting a new leg higher after pulling back within its uptrend. The Mexican Peso (MXN) edges lower in its key pairs on Monday after three consecutive days of mild gains. These came partly on the back of revised forecasts by the Bank of Mexico (Banxico) at its November meeting on Thursday, an optimistic budget announcement from Mexico’s Economy Minister on Friday, and as the waning bullish effect of the “Trump-trade” on the US Dollar (USD). Despite the Peso’s three-day rebound, MXN is in a technical downtrend overall, suggesting vulnerabilities could lurk just out of sight.  Mexican Peso recovery looks vulnerable  The Mexican Peso slightly retreats on Monday after a weak recovery in the second half of last week after Banxico revised its forecast for inflation at the end of 2024 to 4.7% from 4.3%. The change suggests the central bank will probably not cut interest rates as aggressively as previously expected, propping up the Peso. The maintenance of elevated interest rates increases capital inflows into a country, supporting its currency.  Nevertheless, Banxico went ahead with a 25 basis points (bps) (0.25%) cut at its policy meeting on Thursday, bringing its main interest rate down to 10.25% from 10.50% previously. The bank  continued to see the balance of risks “to growth of economic activity remained biased to the downside.” Also on Thursday, Moody’s Ratings cut Mexico’s credit rating to Baa2 “Negative” from “Stable” as a result of a combination of the country’s high budget deficit, which is expected to end 2024 at 5.9% of Gross National Product (GDP), the highest it has been since the 1980s, and risks to the economy from the government’s reforms of the judiciary, which Moody’s views as threatening the rule of law and “eroding checks and balances” to power.  “While our assessment of the quality of institutions in Mexico is already low compared to rating peers, particularly when it comes to rule of law and control of corruption, we will assess whether a further deterioration in the policymaking framework and the independence of the judicial system could limit the government's ability to address rising credit challenges," Moody's said. The Mexican Finance Minister Rogelio Ramírez de la O responded to the downgrade by saying that Moody’s had not taken into account his proposed budget for 2025, which was published the following day. In the 2025 budget, Ramirez de la O forecast an increase in growth of between 2% and 3% and a budget deficit of 3.9% of Gross Domestic Product (GDP).  The budget projection suggests an increase in growth from a rate of 1.5% to 2.5% in 2024 and a reduction in the deficit from the 5.9% expected by the end of 2024, according to Reuters.  Technical Analysis: USD/MXN closes in on November high USD/MXN has pulled back after rallying higher within a rising channel. The short-term trend is probably bullish but could also be sideways. The pullback from the November 12 high has found support at the 50-period Simple Moving Average (SMA) in the 4-hour chart (as seen below), and the pair could be about to start recovering.  USD/MXN 4-hour Chart If USD/MXN extends a new leg higher, it could rally up to a zone between 20.80 (November 6 high) and 20.89 (61.8% Fibonacci extension of the prior rally). A cross of the blue Moving Average Convergence Divergence (MACD) above its red signal line would provide a buy signal and evidence supporting such a move higher.  A break above 20.80 would confirm a higher high and an extension of the bullish trend and unlock the next upside target at 21.00 (round number, upper boundary of channel), where buyers could start to meet resistance.  In case USD/MXN extends its correction lower, support lies in the 19.70s from the 50-day SMA (not shown) the early November lows and the lower boundary line of the rising channel just below. Mexican Peso FAQs What key factors drive the Mexican Peso? The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity. How do decisions of the Banxico impact the Mexican Peso? The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN. How does economic data influence the value of the Mexican Peso? Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate. How does broader risk sentiment impact the Mexican Peso? As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}USD/CAD stays firm near 1.4100 as the US Dollar performs strongly across the board.Fed Powell doesn’t see any urgency for lowering interest rates aggressively.Traders await Canadian inflation data for fresh BoC interest rate cues.The USD/CAD pair holds into gains near a fresh more than four-year high around 1.4100 in Monday’s European session. The Loonie pair strives to maintain its winning spell for the seventh trading day on Monday on multiple tailwinds: strength in the US Dollar (USD) across the board on likely acceleration in the United States (US) inflation due to President-elected Donald Trump’s victory in both houses and weakness in the Canadian Dollar (CAD) on increasing Bank of Canada (BoC) dovish bets.The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, clings to gains near a fresh yearly high of 107.00. Market sentiment is slightly cautious as investors expect the Federal Reserve (Fed) to follow a more gradual policy-easing approach. S&P 500 futures trade cautiously during European trading hours. On Thursday, Fed Chair Jerome Powell pushed back expectations of aggressive interest rate cuts but affirmed that the policy-easing cycle is intact, with inflation remaining on a sustainable track toward the bank’s target of 2%. "The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said and added, “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully." Meanwhile, the CAD remains on the backfoot as trades expect the BoC to cut interest rates again by 50 basis points (bps) in the December meeting. For more interest rate cues, investors await the Canadian Consumer Price Index (CPI) data for October, which will be published on Tuesday. Statistics Canada is expected to show that month-on-month headline CPI rose by 0.3% after a 0.4% deflation in September. On year, the inflation data is expected to have grown by 1.9%, faster than the former reading of 1.6%. Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}Crude Oil edges up slightly on Monday as the war between Russia and Ukraine escalated over the weekend. The G20 meeting, starting on Monday, includes a Ukraine peace deal high on the agenda. The US Dollar Index eases a touch on Monday after having printed a fresh one-year high at 107.07.Crude Oil price is trading below $68.00 on Monday, ticking up slightly following the escalation in the war between Russia and Ukraine over the weekend. Russia launched a large air strike to hit Ukraine’s power grid, while US President Joe Biden’s administration allowed Kyiv to strike Russian territory with its long-range missiles. Solutions around the Ukraine situation will be discussed in the G20 meeting starting Monday in Rio de Janeiro, Brazil. With the turn of events since Friday, several parties – even Ukrainian President Vladimir Zelensky himself – called for an end to the war in 2025. A truce or an end to the situation would mean more downturn for Crude, with Russian Oil possibly being accepted again once sanctions and embargoes are lifted under a peace deal. The US Dollar Index (DXY) is retreating a touch from its fresh one-year high at 107.07 that was printed last week. It looks like markets have repriced all elements from the triumph of President-elect Donald Trump. The focus is shifting back to the Federal Reserve (Fed) and the question if the December rate cut is still a good idea before going into the Trump presidency.  At the time of writing, Crude Oil (WTI) trades at $67.19 and Brent Crude at $71.20.Oil news and market movers: Ukraine situation high on the calendarThe G20 meeting is set to start this Monday in Rio de Janeiro with a peace deal for Ukraine high on the agenda. Over the weekend, the Biden administration delivered a green light for Ukraine to use US missiles beyond Russian borders, seen as a next step in the escalating tensions.  Vortexa data show that the amount of crude Oil held around the world on tankers that have been stationary for at least seven days fell to 50.97 million barrels as of November 15, 14% less than last week, Bloomberg reports.  Nigerian business tycoon Aliko Dangote is looking to raise billions of dollars to step up production at his $20 billion oil refinery on the outskirts of Lagos, the Financial Times reports.Oil Technical Analysis: Pressure building againCrude Oil price is still stuck in the same pattern, posting lower highs and a rather flat level on the downside near $65.00-$66.00. A break lower this support area could quickly see a move to $64.38, a fresh low for 2024. The Relative Strength Index (RSI) on the daily chart suggests that there is still room for a push lower.  On the upside, the 55-day Simple Moving Average (SMA) at $70.04 is the first barrier to consider before the hefty technical level at $73.29, which aligns with the 100-day Simple Moving Average (SMA). The 200-day SMA at $76.59 is still quite far off, although it could get tested in case tensions further intensify.  On the other side, traders need to look towards $67.12 – a level that held the price in May and June 2023 – to find the first support together with that small ascending trend line from October. In case that breaks, the 2024 year-to-date low emerges at $64.75, followed by $64.38, the low from 2023.US WTI Crude Oil: Daily Chart WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.  

European Central Bank (ECB) Governing Council member and Central Bank of Ireland Governor Gabriel Makhlouf said on Monday that overwhelming evidence would be needed to consider a 50 basis points rate cut in December, pre Reuters. Key takeaways "I believe in cautious and prudent approach, believe the policy is working." "We are going meeting by meeting." "Let's see what data tells us; but reasonable to assume we are on a downward trajectory." "Would be premature to start making decisions on what new US administration might do." "I am confident we will meet our target next year, all of us should chill out a bit on whether it will be Q1, Q2 or even Q3." Market reactionEUR/USD showed no reaction to these comments and the pair was last seen trading virtually unchanged on the day at 1.0540.

The US Dollar (USD) is likely to trade in a range of 7.2250/7.2500. In the longer run, momentum is beginning to slow; a breach of 7.2000 would mean that USD is not rising further, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note. Momentum is beginning to slow 24-HOUR VIEW: “Following last Thursday’s rise to 7.2700, we indicated on Friday that ‘Given the severely overbought conditions, USD is unlikely to advance further.’ We were of view that USD ‘is more likely to trade in a range, probably between 7.2350 and 7.2700.’ USD subsequently traded in a range of 7.2308/7.2555, closing slightly lower by 7.2429 (-0.13%). Further range trading still seems likely, even though the softened underlying tone suggests a lower range of 7.2250/7.2500.” 1-3 WEEKS VIEW: “Our most recent narrative was from last Wednesday (13 Nov, spot at 7.22470), wherein ‘The level to monitor is 7.2800 and the next resistance above 7.2800 is at 7.3115.’ USD has not been able to make further headway since then, and momentum is beginning to slow. From here, if USD breaks below 7.2000 (no change in ‘strong support’ level) would mean that USD is not rising further.”

USD/SGD eased into Fri NY close and continued to trade on the back foot this morning. Pair was last seen at 1.3442 levels, OCBC FX analysts Frances Cheung and Christopher Wong notes. Bearish divergence on MACD and rising wedge pattern are forming “Daily momentum is mild bullish but rise in RSI moderated. Bearish divergence on MACD and rising wedge pattern appear to be forming. Technical patterns point to signs of bearish pullback in the near term. Support at 1.3340 (200 DMA), 1.3290 (61.8% fibo retracement of Jun high to Oct low).” “Resistance at 1.3490, 1.3520 levels. Policy uncertainties associated with Trump policies, swings in RMB and JPY should continue to drive USDSGD in the near term. S$NEER was last at 1.27% above modelimplied mid.”

The UK economy grew at a slightly slower pace in the third quarter than economists polled by Bloomberg had expected. The pound came under some pressure as a result, causing EUR/GBP to rise. However, we would be cautious about reading too much into Friday's figures, Commerzbank’s FX analyst Michael Pfister notes. The risks are on the upside “Firstly, quarter-on-quarter growth of 0.14% was very close to the rounding threshold. At the same time, there were some hopeful signs: private consumption grew strongly and thus contributed the lion's share to growth. This was probably due to the continued rise in real wages, which gave consumers more room to maneuver.” “At the same time, the government continued to invest and gross fixed capital formation increased. Basically, a rather volatile sub-component pushed growth down significantly. This component rose sharply in the second quarter, thus having a strong weight in the aggregation. In the third quarter, by contrast, a now relatively small increase pushed growth down accordingly.” “We therefore believe that the third quarter figure somewhat understates long-term growth potential, just as we believe that the growth figures for the first half of the year were somewhat overstated. The UK economy is likely to return to somewhat stronger growth in the coming quarters. We therefore remain cautiously optimistic on sterling, especially as the Bank of England's focus is more on inflation and stronger consumption suggests that the risks are on the upside.”  

Chance for US Dollar (USD) to drop below 153.85; the major support at 153.20 is unlikely to come under threat. In the longer run, pullback in USD could extend to 153.20, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.   Pullback in USD could extend to 153.20 24-HOUR VIEW: “Last Friday, we were of the view that USD ‘is likely to continue to rise.’ Our view was incorrect, as after rising to a high of 156.74, USD plunged to a low of 153.85. USD closed sharply lower by 1.22% at 154.34. While the sharp and swift sell-off appears to be overdone, there is a chance for USD to drop below 153.85 before stabilisation can be expected. The major support at 153.20 is unlikely to come under threat. Resistance is at 154.80; a breach of 155.25 would suggest the weakness in USD has stabilised.” 1-3 WEEKS VIEW: “When USD was at 156.50 last Friday (15 Nov), we indicated that ‘Momentum remains strong, and the next technical objective is at 158.00.’ USD then rose to 156.74 and then in a sudden move, plunged to a low of 153.85. The breach of our ‘strong support’ level at 154.95 indicates that the USD advance from the middle of last week has ended. The current price action is likely part of a pullback that could extend to 153.20. The downward pressure would remain intact as long as 155.80 is not breached.”

Towards the end of last week, the USD rally seemed to have run out of steam. For the time being, EUR/USD seems to be stabilising just above 1.05, which is around 6.5 cents below the interim high at the end of September. This should come as no surprise to anyone. In 2016, the US dollar also experienced temporary sideways movements in the weeks following Donald Trump's election victory. And this time around, the victory probably came as less of a surprise to the market, as the polls had already pointed to it and the US dollar had already appreciated quite a bit before the election. It is therefore likely that much of the USD's initially justified strength has now been priced in, Commerzbank’s FX analyst Michael Pfister notes. EUR/USD seems to be stabilising just above 1.05 “As a result, market participants are likely to turn their attention in the coming weeks to the question of how long the USD strength will last this time around. As a reminder, in 2016/2017 the US dollar also appreciated significantly after the election, but quickly lost this strength in the months following Trump's inauguration. This was probably mainly due to the fact that Trump did not immediately implement his trade policy, which he had already announced at the time, but the tariffs and the trade war only picked up speed in 2018/2019. Then the dollar rebounded.” “I am not saying that history will repeat itself. After all, Trump is likely to be much better prepared this time around, as evidenced by his rapid personnel decisions. But is he so well prepared to implement an inflationary trade policy from day one? Especially if he also wants to impose high tariffs on long-standing allies, I have my doubts that this can be implemented quickly (not to mention the fact that our economists generally doubt that the tariffs will be that high). That's not to say it won't be implemented, just that it could take a bit longer, similar to 2018/2019. Therefore, I think a breather in USD strength is not unwarranted.” “Of course, if it becomes (even) clearer that Trump wants to push through his policies quickly, this could change. However, I am not so much thinking of (even) more USD strength. Rather, I think the euro would suffer. Although the euro has depreciated quite a bit in the aftermath of the election, there is certainly potential for a much weaker euro if tariffs go ahead. Until then, however, the market is likely to wait for further signs that Trump is serious.”

The Swiss Franc (CHF) weakening this episode (QTD) comes alongside the decline also seen in other major FX, though the magnitude of CHF depreciation was slightly lesser (- 4.7% vs USD) compared to JPY, EUR, GBP, AUD (down over 5-8% vs USD). USD/CHF was last seen at 0.8871 levels, OCBC FX analysts Frances Cheung and Christopher Wong notes. Bullish momentum on daily chart intact “Safe-haven characteristic of CHF was likely one of the mitigating factors that saw CHF fell by less. Nevertheless, US election outcome was one of the main reasons that triggered broad USD strength as market contemplates a return of US exceptionalism under Trump presidency/ Red sweep.” “Bullish momentum on daily chart intact though RSI shows signs of easing from near overbought conditions. Near term retracement not ruled out. Support at 0.8800/20 (200 DMA, 50% fibo retracement of 2024 high to low), 0.8720 (21 DMA). Resistance at 0.89 (61.8% fibo), 0.9020 (76.4% fibo).” “Data of interests this week include sight deposits (Mon), trade data, Swiss watch exports (Tue).”

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The Aussie pair finds temporary support but struggles to gain ground as the US Dollar (USD) remains broadly firm. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges lower to near 106.50 in European trading hours but remains close to its annual high of 107.00. The optimism over President-elected Donald Trump implementing its economic agenda in his administration has kept the US Dollar on the frontfoot. Donald Trump is expected to levy hefty tariffs on imports and lower taxes, which will accelerate inflationary pressures and force the Federal Reserve (Fed) to follow a more gradual policy-easing approach. Also, Fed Chair Jerome Powell said on Thursday that the economy has not sent any signals, which strain on cutting interest rates aggressively. However, he commented that price pressures remain on a sustainable path towards the bank’s target of 2%, which allows us to continue heading towards the neutral rate. For the last policy meeting of this year, traders see a 65% chance that the Fed will cut interest rates by 25 basis points (bps) to 4.25%-4.50%, according to the CME FedWatch tool. Meanwhile, the next move in the Australian Dollar (AUD) will likely occur on Tuesday after the release of the Reserve Bank of Australia (RBA) minutes of the monetary policy that took place on November 5. In the policy meeting, the RBA left its Official Cash Rate (OCR) unchanged at 4.35% and Governor Michelle Bullock delivered a hawkish interest rate guidance with concerns over upside risks to inflationary pressures. Economic Indicator RBA Meeting Minutes The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD. Read more. Next release: Tue Nov 19, 2024 00:30 Frequency: WeeklyConsensus: -Previous: -Source: Reserve Bank of Australia Why it matters to traders? The Reserve Bank of Australia (RBA) publishes the minutes of its monetary policy meeting two weeks after the interest rate decision is announced. It provides a detailed record of the discussions held between the RBA’s board members on monetary policy and economic conditions that influenced their decision on adjusting interest rates and/or bond buys, significantly impacting the AUD. The minutes also reveal considerations on international economic developments and the exchange rate value.  

This week, attention will again turn to the region's central banks. Today we start with some PPI growth in the Czech Republic and steadily elevated core inflation in Poland. Tomorrow, the National Bank of Hungary is scheduled to meet, and no change in rates at 6.50% is generally expected. The NBH doesn't have many options at the moment despite inflation and GDP surprising to the downside. Friday's move up in EUR/HUF again shows that the risk-off mood here persists, ING’s FX analysts Frantisek Taborsky notes. EUR/HUF to continue being the main focus this week “Thursday also sees a central bank meeting in Turkey. Again, we should see rates unchanged here at 50%. The focus will be on communication given the higher-than-expected inflation numbers but also a rather dovish tone in the latest inflation report. We expect the first cut in December but obviously it will be a close call dependent on the next inflation print.” “CEE FX is still looking for new levels in the post-election environment. We remain generally bearish here. Lower EUR/USD, downside economic surprises and pricing in more rate cuts should continue to put pressure on FX. Additionally, Friday's sell-off in equity markets may bring back risk-off sentiment. The EUR/HUF will continue to be the main focus this week, having regained above 408 on Friday.” “We believe the NBH meeting will return this story to the spotlight and EUR/HUF will be near 410 again into the meeting. The market has outpriced earlier rate hike expectations, while we saw some rally in HUF rates last week. We think positioning in HUF remains short, but less so than before the election. On one hand, this gives the space to add new short positions. On the other, it suggests that the NBH should have the worst behind it.”  

The New Zealand Dollar (NZD) is expected to trade in a range between 0.5845 and 0.5885. In the longer run, outlook for NZD remains negative; the technical target now is at last year’s low of 0.5775, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note. Outlook for NZD remains negative 24-HOUR VIEW: “We expected NZD ‘to continue to weaken’ last Friday. However, it traded in a 0.5841/0.5880 range. The price movements are likely part of a range trading phase. Today, NZD is expected to trade between 0.5845 and 0.5885.” 1-3 WEEKS VIEW: “We turned negative in NZD last Wednesday (13 Nov, spot at 0.5925), but we indicated that ‘it is too early to tell if the major support at 0.5850 is within reach.’ After NZD fell below 0.5850, we indicated last Friday (15 Nov, spot at 0.5845) that ‘the outlook for NZD remains negative, and the technical target now is at last year’s low of 0.5775.’ We will continue to hold the same view, provided that 0.5915 (‘strong resistance’ previously at 0.5925) is not breached.”

The big event in the GBP market this week is the release of the October CPI report on Wednesday, ING’s FX analysts Francesco Pesole notes. ‘Core services’ inflation to slow down to 4.3% “As usual, markets will be looking almost solely at the services inflation figure, which our economist sees accelerating marginally from 4.9% to 5.0%. However, when stripping out categories that are less relevant for the Bank of England, we see a substantial slowdown to 4.3% in ‘core services’ inflation.” “That would be good news for the BoE, but probably not enough to justify another cut in December. Incidentally, markets might focus a bit more on the ‘non-core’ services CPI figure, sticking to cautious BoE pricing and put a cap on the recent tentative rebound in EUR/GBP.” “Our view on the pair remains moderately bearish in the near term as we see any dovish repricing in BoE expectations coming after a December outsized ECB cut.”  

Momentum indicators are turning flat; Australian Dollar (AUD) is likely to trade in a sideways range of 0.6445/0.6485. In the longer run, further AUD weakness still appears likely; the next level to watch is 0.6400, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note. The next level to watch is 0.6400 24-HOUR VIEW: “When AUD was at 0.6450 last Friday, we highlighted that ‘provided that 0.6490 remains intact, AUD could decline further.’ However, we pointed out that ‘the major support at 0.6400 is unlikely to come into view.’ Our expectations did not turn out, as AUD traded sideways between 0.6443 and 0.6482, closing at 0.6465 (+0.16%). As momentum indicators are turning flat, further sideways trading appears likely, probably in a range of 0.6445/0.6485.” 1-3 WEEKS VIEW: “We indicated last Friday (15 Nov, spot at 0.6450) that ‘further AUD weakness still appears likely.’ We also highlighted that ‘The next level to watch is 0.6400.’ Although downward momentum has slowed somewhat, we will continue to hold the same view for now. Overall, only a breach of 0.6520 (no change in ‘strong resistance’ level) would mean that the weakness in AUD has stabilised.”

USD/JPY rose sharply this morning, and was last seen at 154.84, OCBC FX analysts Frances Cheung and Christopher Wong notes. Bullish momentum on daily chart fades “Markets were earlier anticipating some hint on policy moves from Governor Ueda at an event in Nagoya but his remarks were interpreted as less hawkish. He said that actual timing of adjustments will continue depending on developments in economic activity and prices as well as financial conditions – akin to policy decision being data dependent.” “Last Fri, Finance Minister Kato said authorities will respond appropriately to any excessive move and authorities see one sided, sudden move in FX markets. In the very near term, self-inflicted concerns of officials’ intervention may slow pace of USD/JPY rise.” “Bullish momentum on daily chart faded while RSI was flat. Potential bearish divergence on RSI observed. Further downside play not ruled out. Support at 153.00/30 (21 DMA, 61.8% fibo retracement of Jul high to Sep low) needs to be broken for bears to gather further traction towards 150.70 (50% fibo). Resistance at 156.50 (76.4% fibo).”

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The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 84.37 on Monday, down from 84.70 on Friday. Silver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver. (An automation tool was used in creating this post.)

PMIs have become an increasingly important release for the eurozone after the European Central Bank shifted the focus from inflation to growth and is now taking a broader range of soft activity data into account. The eurozone’s composite PMIs is at 50.0, the break-even level between contraction and expansion, meaning a greater resonance of even small movements in the index when they are published on Friday – especially if on the downside, ING’s FX analysts Francesco Pesole notes. EUR/USD to trade around 1.04 at year-end “Our economists are cautiously optimistic on the eurozone-wide figure, where they expect 50.2 (consensus is 50.0), although they suspect German figures could still disappoint. On this topic, expect a buildup in market scrutiny over the German snap elections in February and what those can mean for both Europe’s (geo)political balance and prospects of any bending of Germany’s strict debt rules. Our colleague Carsten Brzeski argues here how fiscal stimulus will have to come under the new government, regardless of the fiscal break. Still, that will take some time, and one of our key macro calls for 2025 remains that the ECB will need to do the heavy lifting in supporting the economy ahead of further protectionism-related growth headwinds.” “Our short-term call for EUR/USD is that it can hold above 1.050 this week as dollar bulls take a break, but that is admittedly not a high-conviction view. As discussed above, the dollar momentum remains strong and there is no obvious catalyst for an inversion, outside of technical considerations. Obviously, soft EZ PMIs can easily prompt a break lower as markets could price in a 50bp ECB cut in December from the current 30bp. Ultimately, in line with our call for a half-point ECB move in December, we expect EUR/USD to trade around 1.04 at year-end.” “Today, there are a few key ECB speakers, including President Christine Lagarde and Chief Economist Philip Lane. Remember how the latest ECB minutes showed some frictions within the Governing Council on the sustainability of disinflationary drivers. With plenty of ECB-speak this week, we may get a slightly clearer picture of where consensus is on this.”

Data from CFTC on speculative positioning show net US Dollar (USD) longs versus the rest of G10 rising to the highest since July until last Tuesday. In open interest terms, that is 12%, according to our calculations. That is a quite high figure, just above the 1-standard-deviation upper bound, however it is still well below April’s 24% peak. Long USD positions likely grew further throughout last week, but CFTC figures probably fail to capture the depth of the shift to a structural bullish stance on the dollar after Donald Trump’s election. Our perception remains that market positioning is quite stretched on dollar longs, and the greenback remains at risk of some technical correction in the near term, ING’s FX analysts Francesco Pesole notes. DXY to find support around 106.0 “At the same time, the macro story hasn’t really offered any reason for second thoughts on the dollar rally. Inflation data has been hotter than the Federal Reserve's target would tolerate, and Chair Jerome Powell added a layer of caution on future easing in a speech last week. With very little extra information on the US economy being added this week, the market-implied policy divergence between the Fed and most other G10 central banks could mean that any positioning-led correction will be short lived.” “Ultimately, our economists’ call is that the Fed will cut in December. Markets are pricing in 15bp, so there is room for a dovish repricing to hit the dollar. However, that repricing may not happen before jobs data are released in 18 days. That is a relatively long period for markets, and one where – net of any positioning-related wobble – the long dollar ‘Trump trade’ may remain the only clear-cut directional call in FX. We suspect DXY will still find support around 106.0 in case of a correction, and there is a tangible possibility it will be trading above 107.0 by Thanksgiving.” “This week, expect market focus to remain on Trump’s cabinet nominees, in particular when it comes to the Treasury. The only potentially market moving data releases aside from jobless claims will be the leading index, which has however had very limited predicting ability for the direction of the economy. We'll also be looking out for S&P Global PMIs, which are expected to show more of the same for the US: weak manufacturing being more than offset by strong services. There are a few Fed speakers watch too, starting today with Chicago Fed President Austan Goolsbee, who is considered a dovish-leaning member.”

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Pound Sterling struggles near 1.2600 against the US Dollar as investors expect the Fed to follow a more gradual policy-easing approach.Fed officials refrain from projecting the consequences of Trump’s policies on interest rates.The next big move for the British currency will likely occur on Wednesday when UK inflation data for October will be released.The Pound Sterling (GBP) remains under pressure near 1.2600 against the US Dollar (USD) in Monday’s London session. The GBP/USD pair struggles to gain ground as the US Dollar clings to gains near a more-than-a-year high, with the US Dollar Index (DXY) wobbling around 107.00.  The Greenback trades firmly as investors expect the Federal Reserve (Fed) to follow a more gradual rate-cut approach given the recent slight rebound in inflation and the growth outlook on strong expectations that President-elected Donald Trump will be able to implement his economic agenda smoothly. In the December meeting, there is a 62% chance that the Fed will cut interest rates by 25 basis points (bps) to 4.25%-4.50%, according to the CME FedWatch tool. This is significantly down from the almost 77% seen a month ago.   Trump’s victory is also making analysts reassess the Fed’s interest-rate outlook for next year. “The Fed’s Monetary Policy Committee (MPC) will be acutely aware that Donald Trump’s policies could be significantly inflationary, primarily due to the impact of tariffs being passed on to consumers while lower taxes heat up the economy,” analysts at Quilter Investors said.  “Investors will no doubt be combing through their comments carefully for any perceived guidance on how that might impact the path of interest rates going forward,” they added. Meanwhile, Fed officials have refused to comment on the likely impact of Trump’s policies on the monetary policy action and the economic outlook. On Thursday, Fed Chair Jerome Powell said that “it is too early to reach judgments on the effect of Trump policies.” On the economic data front, investors await the preliminary S&P Global Purchasing Managers’ Index (PMI) data for November, which will be published on Friday. Daily digest market movers: Pound Sterling struggles to recover after Friday sell-off The Pound Sterling edges higher against its major peers on Monday, striving to gain ground after Friday’s sell-off. The British currency fell sharply after the United Kingdom (UK) Office for National Statistics (ONS) showed that the economy surprisingly contracted by 0.1% in September. The data also showed that the economy barely grew in the third quarter. The unexpected fall in UK GDP could prompt expectations for more interest rate cuts by the Bank of England (BoE). "We believe that if UK economic data continues to disappoint, the BoE may become more focused on reviving growth," according to analysts at BBVA. The uncertainty over the UK economic outlook is expected to deepen further as the government is caught between choosing the European Union (EU) and the US for strengthening its trade relations. The comments from Stephen Moore, a senior economist advisor to Donald Trump, in an interview with BBC indicated that the US will be less interested in working with the UK if it puts the EU ahead of it.  “The UK is kind of caught in the middle of these two forms of economic model and I believe that Britain would be better off moving towards more of the American model of economic freedom. And if that were the case, I think it would spur the Trump administration’s willingness to do the free trade agreement with the UK," Moore said. His comments came after BoE Governor Andrew Bailey urged the administration to rebuild ties with the European Union. This week, investors will pay close attention to the UK Consumer Price Index (CPI) data for October, which will be published on Wednesday. The inflation data is likely to influence BoE rate cut expectations for the December meeting. Technical Analysis: Pound Sterling hovers near 1.2600The Pound Sterling aims for a firm footing near 1.2600 against the US Dollar in London trading hours on Monday. The GBP/USD pair remains broadly under pressure as it remains well below the 200-day Exponential Moving Average (EMA) at 1.2850. The 14-day Relative Strength Index (RSI) slides sharply to 30.00, suggesting a strong bearish momentum. Looking down, the psychological support of 1.2500 will be a major cushion for Pound Sterling bulls. On the upside, the Cable will face resistance near the 200-day EMA. Pound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

Scope for the Pound Sterling (GBP) to edge lower to 1.2590; the major support at 1.2565 is likely out of reach. In the longer run, GBP is likely to continue to weaken to 1.2565, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note. Below 1.2590 GBP to weaken towards 1.2565 24-HOUR VIEW: “Last Friday, we noted that ‘Downward momentum is showing tentative signs of slowing, but there is scope for GBP to retest the 1.2630 level.’ We added, ‘The major support at 1.2615 is unlikely to come under threat.’ The anticipated decline exceeded our expectations, as GBP fell to a low of 1.2598, closing at 1.2619 (-0.39%). Despite the relatively sharp decline, downward momentum has not increased much. That said, there is scope for GBP to edge lower to 1.2590. The major support at 1.2565 is likely out of reach. Resistance is at 1.2640, followed by 1.2670.” 1-3 WEEKS VIEW: “When GBP was at 1.2665 last Friday (15 Nov), we indicated that GBP “is expected to continue to weaken to 1.2615, possibly 1.2565.” We did not anticipate it to reach 1.2615 as quickly, as it dropped to a of low of 1.2598. While downward momentum has not increased much, GBP is likely to continue to weaken to 1.2565. On the upside, a breach of 1.2745 (‘strong resistance’ level was at 1.2770 last Friday) would indicate that the downward pressure that started early last week has faded.”

The US Dollar (USD) bulls show signs of fatigue even as better US data last Fri did not fuel further USD upticks. DXY was last at 106.52 levels, OCBC FX analysts Frances Cheung and Christopher Wong notes. Potential bearish divergence forming on daily MACD “In response to better-than-expected US data and less dovish rhetoric (from Powell), markets have already scaled back probability of 25bp cut in Dec meeting to ~65% chance (vs 71% chance a week ago). Prospects of Fed cut will continue to adjust as US data comes. This puts focus on data this week: prelim PMIs, Uni of Michigan sentiment data (Fri) before core PCE (27 Nov).” “Firmer print will add to US exceptionalism narrative, keeping USD rates and USD elevated for longer, until the trend turns. Bullish momentum on daily chart moderated while rise in RSI slows near overbought conditions.” “Potential bearish divergence may be forming on daily MACD, but price action requires further monitoring. Near term, not ruling out a technical retracement. Support at 106.50, 105.60 (76.4% fibo) and 104.50/60 levels (21DMA, 61.8% fibo retracement of 2023 high to 2024 low). Resistance at 107, 107.40 (2023 high).”

The Euro (EUR) is likely to trade in a range between 1.0505 and 1.0585. In the longer run, price action continues to suggest EUR weakness; the next support level is at last year’s low, near 1.0450, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note. The next support level is at last year’s low, near 1.0450 24-HOUR VIEW: “The following are excerpts from our update last Friday: ‘Conditions remain oversold, but the weakness still has not quite stabilised just yet. That said, as momentum has slowed somewhat, any further decline is likely part of a lower trading range of 1.0490/1.0580. In other words, EUR is unlikely to break clearly below 1.0490.’ Our view of range trading was not wrong, even though EUR traded in a higher range of 1.0516/1.0592, closing at 1.0541 (+0.10%). There has been no increase in either downward or upward momentum, and we continue to expect EUR to trade in a range, probably between 1.0505 and 1.0585.” 1-3 WEEKS VIEW: “We turned negative in EUR on 07 Nov, when EUR was at 1.0730. After EUR fell below our technical target of 1.0500, we indicated last Friday (15 Nov, spot at 1.0525) that ‘The price action continues to suggest EUR weakness, even though caution is warranted given the deeply oversold conditions.’ We added, ‘The next support is at last year’s low, near 1.0450.’ EUR then snapped its 5-day losing streak, closing higher by 0.10% at 1.0541. Although downward momentum has slowed somewhat, only a breach of 1.0610 (no change in ‘strong resistance’ level) would indicate that EUR is not weakening further. Meanwhile, oversold conditions could lead to a couple of days of range trading.”

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}European Central Bank (ECB) Vice President Luis de Guindos said on Monday that “the balance of risks has shifted from concerns about high inflation to fears over economic growth.” Additional takeaways The growth outlook is clouded by uncertainty about economic policies and the geopolitical landscape. Trade tensions could rise further, increasing tail risk of events materializing. Market reaction These prudent remarks from the ECB policymaker fail to deter the Euro’s recovery, as the EUR/USD pair edges 0.25% higher on the day to near  1.0570 at the press time. ECB FAQs What is the ECB and how does it influence the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. What is Quantitative Easing (QE) and how does it affect the Euro? In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic. What is Quantitative tightening (QT) and how does it affect the Euro? Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.  

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}NZD/USD may depreciate further as daily chart analysis indicates a strengthening bearish bias.The pair attempts to break below the lower boundary of the descending channel at the 0.5850 level.The immediate resistance appears at the nine-day EMA at 0.5901, followed by the 14-day EMA at 0.5928.The NZD/USD pair retraces its recent gains, trading around 0.5850 during the European hours on Monday. A review of the daily chart highlights a growing bearish bias, as the pair tests the lower boundary of its descending channel pattern. The nine-day Exponential Moving Average (EMA) remains below the 14-day EMA, signaling persistent weakness in short-term price momentum. Meanwhile, the 14-day Relative Strength Index (RSI) hovers around the 30 level, indicating oversold conditions for the NZD/USD pair and hinting at the possibility of an upward correction. Regarding the support, the NZD/USD pair is testing the lower boundary of the descending channel, which aligns with the throwback support at the psychological level of 0.5850. A decisive break below this channel would reinforce the bearish outlook, increasing downward pressure and potentially driving the pair toward its two-year low of 0.5772, last seen in November 2023.  On the upside, immediate resistance lies at the nine-day EMA at 0.5901, followed by the 14-day EMA at 0.5928, which coincides with the upper boundary of the descending channel. A breakout above this channel would enhance bullish momentum, paving the way for the NZD/USD pair to target the psychological level of 0.6100. NZD/USD: Daily ChartNew Zealand Dollar PRICE Today The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the weakest against the Euro.   USD EUR GBP JPY CAD AUD NZD CHF USD   -0.05% 0.03% 0.40% 0.10% 0.16% 0.42% -0.12% EUR 0.05%   0.25% 0.57% 0.26% 0.35% 0.59% 0.05% GBP -0.03% -0.25%   0.33% 0.00% 0.09% 0.34% -0.21% JPY -0.40% -0.57% -0.33%   -0.31% -0.18% 0.08% -0.44% CAD -0.10% -0.26% -0.01% 0.31%   0.08% 0.32% -0.21% AUD -0.16% -0.35% -0.09% 0.18% -0.08%   0.24% -0.32% NZD -0.42% -0.59% -0.34% -0.08% -0.32% -0.24%   -0.53% CHF 0.12% -0.05% 0.21% 0.44% 0.21% 0.32% 0.53%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).

EUR/CAD gains positive traction for the third straight day and climbs to a one-week top.The mixed technical setup warrants some caution before positioning for further move-up.A sustained strength beyond 1.4915-1.4920 might shift the bias back in favor of bulls.The EUR/CAD cross attracts some follow-through buying at the start of a new week and looks to build on its recovery from the vicinity of the 1.4700 mark, or the lowest level since July 10 touched last week. Spot prices climb to a one-week top during the first half of the European session and currently trade around the 1.4870 region, up 0.25% for the day.  A modest downtick in the US Dollar (USD) provides a modest lift to the shared currency. Furthermore, bets for a larger interest rate cut by the Bank of Canada (BoC) continue to undermine the Canadian Dollar (CAD) and act as a tailwind for the EUR/CAD cross. That said, rebounding Crude Oil prices could limit deeper losses for the commodity-linked Loonie and cap gains for the currency pair. From a technical perspective, the EUR/CAD cross is currently placed near the 200-day Exponential Moving Average (EMA). This is closely followed by the 38.2% Fibonacci retracement level of the downfall witnessed over the past two weeks, around the 1.4885 region, and the 1.4900 mark. A sustained strength beyond the said barriers might shift the bias in favor of bulls and set the stage for further gains.  That said, oscillators on the daily chart – though have been recovering from lower levels – are holding in negative territory. This, in turn, makes it prudent to wait for strong follow-through buying beyond the 1.4915-1.4920 area before confirming that the EUR/CAD cross has formed a near-term bottom and positioning for a move beyond the 1.4950 area (50% Fibo. level), towards reclaiming the 1.5000 psychological mark. On the flip side, the 23.6% Fibo. level, around the 1.4820 region, now seems to protect the immediate downside ahead of the 1.4790-1.4785 zone. The subsequent downfall could expose the multi-month low, around the 1.4710 area. The EUR/CAD cross could eventually weaken further below the 1.4700 round figure and accelerate the downfall towards testing the next relevant support near the 1.4675 region. EUR/CAD daily chart

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}AUD/JPY depreciated as BoJ Ueda reiterated that interest rate hikes would proceed gradually.BoJ Governor Ueda also emphasized the importance of carefully assessing the impact of FX movements.RBA Bullock stated that current interest rates will remain unchanged until the central bank is confident about the inflation outlook.The AUD/JPY cross has trimmed its daily gains and trades near 99.90 during European trading hours on Monday. Meanwhile, the Japanese Yen (JPY) faced headwinds following remarks from Bank of Japan (BoJ) Governor Kazuo Ueda. Ueda reiterated that interest rate hikes would proceed gradually, contingent on the economy meeting expectations, but did not specify a timeline for future increases. In a subsequent statement, Ueda emphasized the importance of carefully assessing the impact of foreign exchange (FX) movements on the economy, price forecasts, and associated risks at each policy meeting. He warned that failing to adjust monetary support appropriately could necessitate rapid rate hikes in the future. Ueda refrained from commenting on short-term FX fluctuations. Japan's Finance Minister Katsunobu Kato issued a warning on Friday, stating that the government will closely monitor the foreign exchange (FX) market with heightened vigilance. Kato emphasized that appropriate measures would be taken to address any excessive movements in the currency. The Australian Dollar (AUD) gained ground following hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock last Thursday. Bullock emphasized that current interest rates are sufficiently restrictive and will remain unchanged until the central bank is confident about the inflation outlook. Recent data indicated a slowdown in employment growth for October, while the unemployment rate held steady, highlighting the resilience of the labor market. Market focus now shifts to the release of the latest RBA meeting minutes on Tuesday, which could offer further insights into the central bank's policy stance. Central banks FAQs What does a central bank do? Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%. What does a central bank do when inflation undershoots or overshoots its projected target? A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing. Who decides on monetary policy and interest rates? A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%. Is there a president or head of a central bank? Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.

European Central Bank (ECB) policymaker and Bundesbank President Joachim Nagel said on Monday, “Trump's tariffs may have a minor impact on inflation.” He added, “global integration would have to decrease substantially to cause a noticeable rise in inflationary pressures.”

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}EUR/USD consolidates above 1.0500 as investors look for fresh cues for Fed-ECB likely interest rate action in December.Fed’s Powell emphasized that there is no need to rush for rate cuts.Fears of a US-Eurozone trade war have escalated among investors.EUR/USD trades sideways slightly above the psychological support of 1.0500 at the start of the week. The major currency pair consolidates as the US Dollar’s (USD) rally stalls after posting a fresh annual high. The US Dollar Index (DXY), which gauges Greenback’s value against six major currencies, looks for fresh triggers to extend its upside above the key resistance of 107.00. According to analysts at Capital Economics, "While a period of consolidation looks likely in the near term, we have revised up our forecasts for the US Dollar and now project a further 5% appreciation by the end of 2025." Economists added, "That is based primarily on a view that President-elected Donald Trump will push ahead with the core tariff policies he proposed on the campaign trail and that the United States (US) economy will continue to outperform its major peers." Investors are looking for fresh cues to know how Trump’s policies will guide the monetary policy action for the December meeting and 2025. Meanwhile, Federal Reserve (Fed) officials refrain from projecting the likely consequences of Trump’s policies on the economy and the interest rate policy. In the event at Federal Bank of Dallas on Thursday, Fed Chair Jerome Powell said, "I think it's too early to reach judgments here." Powell added, "We don't really know what policies will be put in place." On the interest rate outlook, Jerome Powell said that the economy is not sending any signals that might force us to ramp up rate cuts, however, he reiterated that inflation is on a sustainable path towards the bank’s target of 2% that allows them to head towards the neutral rate.This week, investors will focus on the preliminary S&P Global Purchasing Managers Index (PMI) data for November, which will be published on Thursday. The PMI data will show the current status of private business activity and the impact of Trump’s victory on business optimism.  Daily digest market movers: EUR/USD stays under pressure amid worries over likely Eurozone-US trade war EUR/USD trades sideways, with investors focusing on European Central Bank (ECB) President Christine Lagarde’s speech at an event in Paris scheduled at 18:30 GMT. Investors would like to know how much Trump’s protectionist policies will impact the Eurozone economy. Also, market participants would look for cues about the likely interest rate cut size in the December meeting.  Fears of a trade war between the Eurozone and the United States have deepened after the commentary of Stephen Moore, a senior economist advisor to Donald Trump, who said at BBC radio over the weekend that the US would be less interested in a free trade deal with Britain if the government put its economic relations with the European Union (EU) ahead of those with the US, Reuters reported. The spark of a trade war between the Eurozone and the US arose when Trump mentioned, in his election campaign, that the euro bloc would "pay a big price" for not buying enough American exports. According to analysts at ING, the ECB is expected to cut interest rates again in December, but a 50 basis points (bps) cut is far from certain. Technical Analysis: EUR/USD hovers around 1.0500EUR/USD wobbles above the immediate support of 1.0500 in European trading hours on Monday. The outlook of the major currency pair remains bearish as all short- to long-term Exponential Moving Averages (EMAs) are declining.  The 14-day Relative Strength Index (RSI) oscillates in the bearish range of 20.00-40.00, adding to evidence of more weakness in the near term. Looking down, the pair is expected to find a cushion near the October 2023 low at around 1.0450. On the flip side, the round-level resistance of 1.0600 will be the key barrier for the Euro bulls. Euro FAQs What is the Euro? The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

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The EUR/GBP cross faces headwinds as the Euro remains under pressure due to the European Central Bank's (ECB) dovish outlook, with a policy rate cut anticipated at its December meeting. In its Autumn 2024 forecast, the European Commission predicts 0.8% growth for the Euro Area in 2024, unchanged from its Spring estimate. However, the growth projection for 2025 has been slightly lowered to 1.3% from 1.4%, while the Eurozone economy is expected to expand by 1.6% in 2026. Commenting on the outlook, EU Economy Commissioner Paolo Gentiloni remarked, "As inflation continues to ease and growth in private consumption and investment gains momentum, coupled with record-low unemployment, growth is expected to gradually accelerate over the next two years." The UK economy expanded by 0.1% quarter-on-quarter in the three months ending September, slowing from the 0.5% growth seen in Q2 and missing market expectations of a 0.2% increase. Year-on-year, UK GDP grew by 1.0% in Q3, aligning with forecasts and improving on the 0.7% growth recorded in Q2. On a monthly basis, GDP contracted by 0.1% in September, reversing a 0.2% gain in August. Capital Economics’ Deputy Chief UK Economist Ruth Gregory reiterated their expectation that the Bank of England (BoE) will maintain rates at 4.75% in December, with a 25-basis-point rate cut anticipated in February. Interest rates FAQs What are interest rates? Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation. How do interest rates impact currencies? Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money. How do interest rates influence the price of Gold? Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold. What is the Fed Funds rate? The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}EUR/JPY gains momentum to near 163.00 in Monday’s early Asian session, up 33% on the day. The lack of clear guidance on the next BoJ rate hike timing weighs on the JPY. ECB’s Cipollone said the central bank should cut rates further to support recovery.The EUR/JPY cross attracts some buyers to around 163.00 during the early European session on Monday. The Japanese Yen (JPY) weakens against the Euro (EUR) amid the uncertainty over the Bank of Japan's (BoJ) rate-hike plans. The European Central Bank (ECB) Vice President Luis de Guindos and Phillip Lane are scheduled to speak on Monday. 

The BoJ Kazuo Ueda said this Monday that the timing for when the central bank adjusts the degree of our monetary support will depend on the economic, price, and financial outlook. Ueda further stated that the Japanese central bank wouldn't necessarily wait for external risks to completely fade before hiking again. Nonetheless, he offered few clues on whether the BoJ would raise rates in December. The lack of clear guidance on the next rate hike timing exerts some selling pressure on the JPY and creates a tailwind for EUR/JPY. 

The verbal intervention from the Japanese authorities could provide some support to the JPY and cap the upside for the cross. Japan's Finance Minister Katsunobu Kato said on Friday that the Japanese government will scrutinize the Foreign exchange market with very high vigilance and take appropriate action against excessive moves.

On the Euro front, the European Central Bank (ECB) board member Piero Cipollone noted on Friday that the ECB should cut interest rates further to support a nascent economic recovery in the Eurozone and also in the face of potential new trade tariffs in the US. However, the pace and extent of rate cuts will depend on the incoming data. The dovish comment from the ECB policymakers could undermine the Euro in the near term.  Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.  

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The economic calendar will not feature any high-impact macroeconomic data releases on Monday. Market participants will keep a close eye on headlines surrounding geopolitics and pay attention to comments from central bank officials. Boosted by hawkish comments from Federal Reserve (Fed) officials, including Chairman Jerome Powell, the US Dollar (USD) Index gained more than 1.5% in the previous week. The index stays in a consolidation phase above 106.50 in the European morning on Monday. Later in the day, Chicago Fed President Austan Goolsbee will be delivering a speech. Meanwhile, US stock index futures trade in positive territory after Wall Street's main indexes closed in the red on Friday.  US Dollar PRICE Last 7 days The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the British Pound.   USD EUR GBP JPY CAD AUD NZD CHF USD   1.65% 2.22% 1.14% 1.33% 1.83% 1.77% 1.26% EUR -1.65%   0.55% -0.39% -0.21% 0.28% 0.22% -0.30% GBP -2.22% -0.55%   -1.02% -0.74% -0.26% -0.32% -0.83% JPY -1.14% 0.39% 1.02%   0.19% 0.60% 0.72% 0.12% CAD -1.33% 0.21% 0.74% -0.19%   0.55% 0.42% -0.09% AUD -1.83% -0.28% 0.26% -0.60% -0.55%   -0.08% -0.57% NZD -1.77% -0.22% 0.32% -0.72% -0.42% 0.08%   -0.51% CHF -1.26% 0.30% 0.83% -0.12% 0.09% 0.57% 0.51%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote). Citing two US officials familiar with the decision, CNN News reported over the weekend that US President Joe Biden has authorized Ukraine to use powerful long-range American weapons to strike inside Russia. Reporting on the matter, “the change comes largely in response to Russia's deployment of North Korean ground troops to supplement its own forces, a development that has caused alarm in Washington and Kyiv,” Reuters said.EUR/USD fell nearly 1.7% last week and registered its lowest weekly close since October 2023. The pair holds steady in the early European session and fluctuates at around 1.0550. During the American trading hours, European Central Bank (ECB) President Christine Lagarde will deliver a speech titled "The Economic and Human Issues of a Changing Era" at an event organized by The Collège des Bernardins in Paris, France.GBP/USD declined over 2% last week and closed in negative territory for the seventh consecutive week. The pair trades in a narrow range slightly below 1.2650 early Monday. On Wednesday, the UK's Office for National Statistics will publish Consumer Price Index (CPI) data for October. Bank of Japan (BoJ) Governor Kazuo Ueda said on Monday that the Japanese economy is recovering moderately despite weak signs. "We will scrutinize at each policy meeting how foreign exchange moves affect our economic, price forecasts and risks," Ueda reiterated. After falling more than 1% on Friday, USD/JPY moves up and down in a narrow band at around 154.50 on Monday.Gold remained under bearish pressure last week and dropped to its lowest level in nearly two months below $2,540 on Thursday. Following a quiet Friday, XAU/USD gains traction to begin the new week and recovers toward $2,600. Central banks FAQs What does a central bank do? Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%. What does a central bank do when inflation undershoots or overshoots its projected target? A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing. Who decides on monetary policy and interest rates? A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%. Is there a president or head of a central bank? Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.  

In a speech in Canberra on Monday, Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent said that the ”forward guidance in Australia might be less useful than in the United States.” Further comments Variable rate mortgages are a key difference of the Australian system. No evidence monetary policy overall is more potent in Australia than elsewhere. Arrears rates here remain low, similar to economies with much more fixed-rate lending. Most borrowers have buffers to help manage higher interest rates. Worth reviewing the RBA’s approach to forward guidance from time to time. Including considering other ways the RBA might clarify the nature of its reaction function. Market reaction AUD/USD is consolidating its rebound following these comments. The pair currently trades at 0.6465, up 0.07% on the day.

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The Greenback edges lower as Trump Trades lose momentum. However, the encouraging US economic data and the cautious comments from the Fed officials might cap the downside for the pair. On Friday, Boston Fed President Susan Collins stated that monetary policy remains restrictive and an interest rate cut is still on the table for December, but a final decision would be based on the incoming data. Meanwhile, Chicago Fed President Austan Goolsbee said that markets tend to overreact to interest rate changes and that the Fed should maintain a slow and steady approach to reaching the neutral rate.

Data released by the Commerce Department's Census Bureau on Friday showed that US Retail Sales increased by 0.4% in October, following the 0.8% rise recorded in September (revised from 0.4%), beating the estimation of 0.3%. 

On the other hand, the renewed geopolitical tensions between Russia and Ukraine might boost the safe-haven currency like the Swiss Franc (CHF). Citing two US officials familiar with the decision, CNN News reported on Sunday that US President Joe Biden's administration allowed Ukraine to use US arms to strike inside Russia in a significant reversal of Washington's policy in the Ukraine-Russia conflict. 

  Swiss Franc FAQs What key factors drive the Swiss Franc? The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone. Why is the Swiss Franc considered a safe-haven currency? The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in. How do decisions of the Swiss National Bank impact the Swiss Franc? The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF. How does economic data influence the value of the Swiss Franc? Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate. How does the Eurozone monetary policy affect the Swiss Franc? As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.  

FX option expiries for Nov 18 NY cut at 10:00 Eastern Time via DTCC can be found below. EUR/USD: EUR amounts 1.0500 1.2b 1.0520 1b 1.0600 2.1b 1.0625 1.2b 1.0650 626m USD/JPY: USD amounts                      154.50 450m AUD/USD: AUD amounts 0.6630 600m USD/CAD: USD amounts        1.3950 789m NZD/USD: NZD amounts 0.5835 853m

.fxs-major-currency-prices-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-major-currency-prices-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-major-currency-prices-content{color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:8px 16px}table.fxs-major-currency-prices-currency-prices-table{width:100%;text-align:center;border-collapse:collapse;font-size:1rem}table.fxs-major-currency-prices-currency-prices-table th{background-color:#f2f2f2}table.fxs-major-currency-prices-currency-prices-table td{color:#fff}table.fxs-major-currency-prices-currency-prices-table td.green{background-color:#9cd6cd}table.fxs-major-currency-prices-currency-prices-table td.red{background-color:#faafb5}table.fxs-major-currency-prices-currency-prices-table td.blue-grey{background-color:#888a93}.fxs-major-currency-prices-currency-prices-legend{font-size:11px;margin:8px;color:#49494f}@media (min-width:680px){.fxs-major-currency-prices-content{font-size:16px;line-height:21.6px}.fxs-major-currency-prices-title{font-size:19.2px;line-height:27.2px}}.fxs-major-currency-prices-currency-price td.dark-green{background-color:#39ad9a}.fxs-major-currency-prices-currency-price td.light-green{background-color:#9cd6cd}.fxs-major-currency-prices-currency-price td.gray{background-color:#888a93}.fxs-major-currency-prices-currency-price td.light-red{background-color:#faafb5}.fxs-major-currency-prices-currency-price td.strong-red{background-color:#f55e6a}GBP/USD rebounds from oversold zone amid potential bullish reversal.The lower boundary of the descending wedge at the psychological level of 1.2600 acts as the primary support.The pair may approach the upper boundary of the descending wedge, aligned with the nine-day EMA at 1.2746 level.GBP/USD breaks its six-day losing streak, trading around 1.2630 during the Asian hours on Monday. The daily chart analysis shows the sellers' control weakens as the pair moves downwards within the descending wedge pattern. This signals a potential bullish reversal for the pair. Additionally, the 14-day Relative Strength Index (RSI) is at the 30 level, suggesting an oversold situation for the pair and a potential for an upward correction as soon as possible. On the downside, the GBP/USD pair seems to test the lower boundary of the descending wedge at the psychological level of 1.2600. A break below this level would reinforce the bearish bias and put downward pressure on the pair to navigate the region around the yearly low at 1.2299, which was recorded on April 22. For resistance, the GBP/USD pair could test the upper boundary of the descending wedge, aligned with the nine-day Exponential Moving Average (EMA) at 1.2746 level. Further barrier appears at the psychological level of 1.2800, aligned with the 14-day EMA at 1.2804 level. GBP/USD: Daily ChartBritish Pound PRICE Today The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Japanese Yen.   USD EUR GBP JPY CAD AUD NZD CHF USD   0.04% -0.05% 0.34% -0.03% -0.09% 0.14% -0.02% EUR -0.04%   0.08% 0.42% 0.05% 0.02% 0.22% 0.06% GBP 0.05% -0.08%   0.37% -0.03% -0.07% 0.14% -0.02% JPY -0.34% -0.42% -0.37%   -0.38% -0.36% -0.14% -0.29% CAD 0.03% -0.05% 0.03% 0.38%   -0.04% 0.17% 0.01% AUD 0.09% -0.02% 0.07% 0.36% 0.04%   0.20% 0.04% NZD -0.14% -0.22% -0.14% 0.14% -0.17% -0.20%   -0.15% CHF 0.02% -0.06% 0.02% 0.29% -0.01% -0.04% 0.15%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

.fxs-related-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-related-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}.fxs-related-module-related-link a{text-decoration:none;color:#1b1c23;font-weight:700;font-size:16px;font-style:normal;line-height:20px}.fxs-related-module-related-link a:hover,.fxs-related-module-related-link:hover,.fxs-related-module-related-link:hover a{color:#e4871b}.fxs-related-module-related-link a:hover{text-decoration:none}@media (min-width:680px){.fxs-related-module-title{font-size:19.2px;line-height:27.2px}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}} Bank of Japan (BoJ) Governor Kazuo Ueda is back on the wires on Monday, noting that “we will check, at each policy meeting, data and factors available at the time in deciding policy.” Additional comments There are numerous factors we want to check, including on the US economiy but we won't necessarily wait until there is clarity for all of them. Won't comment on short-term FX moves. We will scrutinize at each policy meeting how FX moves affect our economic, price forecasts and risks. If we don't adjust degree of monetary support appropriately, we could be forced to hike rates rapidly. We are seeing progress in sustainably achieving price target as seen in service price developments. Weak yen pushes up costs and have big negative impact on consumption, but positive for exports, inbound tourism. Keeping real interest rate low for too long could accelerate underlying inflation above 2%, force us to hike rates rapidly. Don't think there is huge build-up of Yen carry positions either way, compared with situation in July. Related newsBoJ’s Ueda: Japan’s economy recovering moderatelyJapanese Yen sticks to modest losses against USD amid BoJ rate hike uncertaintyUSD/JPY: The levels to monitor are 157.00 and 157.50 155.36 – UOB Group 

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}EUR/AUD softens to around 1.6285 in Monday’s early European session.The cross maintains the negative outlook below the key 100-period EMA, but further consolidation cannot be ruled out. The initial support level emerges at 1.6264; the immediate resistance level is seen at 1.6317. The EUR/AUD cross weakens to near 1.6285 during the early European session on Monday. The Australian Dollar (AUD) gathers strength against the shared currency amid the hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock last week. 

The RBA reiterated that “the Board is not ruling anything in or out” and that there is “the need to remain vigilant to upside risks to inflation.” Traders brace for the RBA Meeting Minutes from its last board meeting for more clues on future rates, which are due on Tuesday. 

According to the 4-hour chart, the EUR/AUD cross keeps the bearish vibe, with the price holding below the key 100-period Exponential Moving Average (EMA). However, further consolidation cannot be ruled out as the Relative Strength Index (RSI) hovers around the midline, suggesting the neutral momentum in the near term. 

The lower limit of the Bollinger Band at 1.6264 acts as an initial support level for the cross. The crucial contention level is seen in the 1.6205-1.6200 region, representing the psychological level and the low of November 12. The additional downside filter to watch is 1.6135, the low of October 18. 

On the bright side, the first upside barrier for EUR/AUD is located at 1.6317, the 100-period EMA. Further north, the next hurdle to watch is 1.6337, the upper boundary of the Bollinger Band. Any follow-through buying could see a rally to 1.6430, the low of November 5.   EUR/AUD 4-hour chartAustralian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}Silver kicks off the new week on a positive note, though the upside potential seems limited.The technical setup supports prospects for the emergence of fresh selling at higher levels. A sustained strength beyond the $31.00 mark is needed to negate the negative outlook.Silver (XAG/USD) regains positive traction at the start of a new week and climbs to the $30.70-$30.75 area during the Asian session, albeit it remains confined in a multi-day-old range around the 100-day Simple Moving Average (SMA). The XAG/USD last week rebounded from the $29.70-$29.65 support zone, representing the 61.8% Fibonacci retracement level of the August-October rally. Moreover, the emergence of fresh buying on Monday favors bullish traders. That said, technical indicators on the daily chart are holding in negative territory and are still away from being in the oversold zone. Hence, any subsequent move up is more likely to confront stiff resistance and remain capped near the $31.00 round-figure mark.  Some follow-through buying, however, will suggest that the recent corrective fall from the vicinity of the $35.00 psychological mark, or a 12-year peak touched in October, has run its course and pave the way for additional gains. The XAG/USD might then climb to the next relevant hurdle near the $31.70 area (38.2% Fibo. level) before aiming to reclaim the $32.00 round figure.  On the flip side, the $30.20 region, followed by the $30.00 psychological mark could act as immediate support ahead of the $29.70-$29.65 area, or a two-month low touched on Friday. A convincing break below the latter will be seen as a fresh trigger for bearish traders and drag the XAG/USD below the $29.00 mark, towards the very important 200-day SMA support near the $28.80-$28.75 zone en route to the $28.40-$28.35 region, or the 78.6% Fibo. level. Silver daily chartSilver FAQs Why do people invest in Silver? Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets. Which factors influence Silver prices? Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices. How does industrial demand affect Silver prices? Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices. How do Silver prices react to Gold’s moves? Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.  

.fxs-related-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left}.fxs-related-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}.fxs-related-module-related-link a{text-decoration:none;color:#1b1c23;font-weight:700;font-size:16px;font-style:normal;line-height:20px}.fxs-related-module-related-link a:hover,.fxs-related-module-related-link:hover,.fxs-related-module-related-link:hover a{color:#e4871b}.fxs-related-module-related-link a:hover{text-decoration:none}@media (min-width:680px){.fxs-related-module-title{font-size:19.2px;line-height:27.2px}.fxs-related-module-related-link a{font-size:19.2px;line-height:25.92px}} .fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} Gold prices rose in India on Monday, according to data compiled by FXStreet. The price for Gold stood at 7,032.01 Indian Rupees (INR) per gram, up compared with the INR 6,952.83 it cost on Friday. The price for Gold increased to INR 82,019.95 per tola from INR 81,096.42 per tola on friday. Unit measure Gold Price in INR 1 Gram 7,032.01 10 Grams 70,320.07 Tola 82,019.95 Troy Ounce 218,720.00   FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly. Related newsGold price advances closer to $2,600 on geopolitical risks, subdued USD price actionGold Price Forecast: XAU/USD bounces off key support on renewed Russia-Ukraine geopolitical risksGold Weekly Forecast: Focus will be on the real economyGold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up. (An automation tool was used in creating this post.)

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}Gold price attracts some haven flows on Monday amid rising geopolitical risks. The USD remains on the defensive below a one-year high and also lends support.Bets for less aggressive Fed rate cuts and elevated US bond yields to cap gains. Gold price (XAU/USD) gains strong positive traction on Monday and reverses a part of last week's sharp decline to the lowest level since September 12. The commodity, for now, seems to have snapped a six-day losing streak and is supported by reviving safe-haven demand, bolstered by the risk of a further escalation of geopolitical tensions. Apart from this, subdued US Dollar (USD) price action is seen as another factor offering some support to the precious metal. The upside for the Gold price, however, seems limited in the wake of expectations that US President-elect Donald Trump's policies will likely rekindle inflationary pressures and limit the scope for further rate cuts by the Federal Reserve (Fed). This has been a key factor behind the recent upsurge in the US Treasury bond yields, which should continue to act as a tailwind for the Greenback and keep a lid on any meaningful appreciation for the non-yielding Gold price.  Gold price benefits from geopolitical risks; bulls seem non-committed amid less dovish Fed Gold price registered its biggest weekly decline since September 2023 and dropped to over a two-month low last week amid the recent strong US Dollar rally to over a one-year high.  Geopolitical developments over the weekend drove some haven flows and assisted the precious metal to gain strong positive traction during the Asian session at the start of a new week.  US President Joe Biden authorized Ukraine to use US-supplied long-range missiles to strike deeper inside Russia, which has deployed North Korean troops to reinforce its war. A Russian attack on a nine-story building killed at least eight people in the northern city of Sumy. Russia also launched a massive drone and missile attack targeting energy infrastructure.  Israeli forces killed at least 111 Palestinians in the Gaza Strip on Saturday and continued military operations in Lebanon after assassinating Hezbollah’s top media relations officer, Mohammad Afif. Investors now seem convinced that President-elect Donald Trump's tariff plans and debt-funded tax cuts would stoke inflation, potentially slowing the Federal Reserve's rate easing cycle.  Fed Chair Jerome Powell said last Thursday that there’s no need to hurry into cutting interest rates amid a resilient economy, a strong job market, and inflation still above the 2% target. Boston Fed President Susan Collins said in an interview that another rate cut in December is on the table, but it is not a "done deal" and that there's no preset path for monetary policy. Separately, Chicago Fed President Austan Goolsbee noted that as long as we keep making progress toward the 2% inflation goal, rates will be a lot lower than where they are now. The yield on the benchmark 10-year US government bond stands firm near a multi-month peak, which favors the USD bulls and might cap gains for the non-yielding yellow metal. Gold price climbs closer to $2,600 after defending 100-day SMA / 50% retracement  confluence From a technical perspective, the recent sharp pullback from the all-time peak stalled near the 50% retracement level of the June-October rally. The said support, around the $2,536-2,535 area, coincided with the 100-day Simple Moving Average and should now act as a key pivotal point. A convincing break below will be seen as a fresh trigger for bearish traders and pave the way for further losses. The subsequent downfall could drag the Gold price further towards the $2,500 psychological mark en route to the 61.8% Fibo. level, around the $2,480 region. On the flip side, any subsequent strength above the $2,600 mark (38% Fibo. level) is likely to confront stiff resistance and remain capped near the $2,620-2,622 region. Some follow-through buying, however, could trigger a short-covering rally towards the $2,655-2,657 congestion zone, or the 50-day SMA, en route to the $2,672-2,673 region (23.6% Fibo. level). A sustained move beyond the latter might shift the bias in favor of bulls and allow the Gold price to reclaim the $2,700 round figure.  Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}USD/CAD grapples to extend its winning streak for the seventh consecutive session on Monday.The US Dollar’s strength is bolstered by recent hawkish remarks from Federal Reserve Fed officials.The commodity-linked CAD may receive support from positive sentiment surrounding Oil prices amid escalated concerns over possible supply disruptions.USD/CAD trades around 1.4090 during the Asian hours on Monday, holding its ground near the four-year high of 1.4105, which was reached on Friday. The upside of the loonie pair is attributed to a stronger US Dollar (USD), driven by recent hawkish remarks from Federal Reserve (Fed) officials. Fed Chair Jerome Powell downplayed the likelihood of imminent rate cuts, highlighting the economy's resilience, robust labor market, and persistent inflationary pressures. Powell remarked, "The economy is not sending any signals that we need to be in a hurry to lower rates." Moreover, on Friday, Federal Reserve Bank of Chicago President Austan Goolsbee emphasized the importance of the Fed adopting a cautious, gradual approach in moving toward the neutral rate. Meanwhile, Boston Fed President Susan Collins tempered expectations for continued rate cuts in the near term while maintaining market confidence in a potential rate reduction in December.The USD/CAD pair may break its six-day winning streak as the commodity-linked Canadian Dollar (CAD) could strengthen, buoyed by positive sentiment surrounding Oil prices. This optimism is driven by heightened concerns over potential supply disruptions amid the escalating tensions between Russia and Ukraine. However, the Canadian Dollar faces downward pressure due to expectations that the Bank of Canada (BoC) will accelerate interest rate cuts in response to cooling inflation and a struggling economy. Traders are likely to focus on Tuesday's Canadian CPI inflation report for fresh insights into the central bank's policy direction. Canadian Dollar FAQs What key factors drive the Canadian Dollar? The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar. How do the decisions of the Bank of Canada impact the Canadian Dollar? The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive. How does the price of Oil impact the Canadian Dollar? The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD. How does inflation data impact the value of the Canadian Dollar? While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar. How does economic data influence the value of the Canadian Dollar? Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}WTI receives minor support due to increased fears over possible supply disruptions amid rising geopolitical tensions.Russia launched its largest airstrike on Ukraine in nearly three months.Biden allows Ukraine to use Army Tactical Missile Systems (ATACMS) to strike inside Russia.The West Texas Intermediate (WTI) Oil price holds steady above $67.00 per barrel during Monday's Asian trading session, reversing a recent decline as escalating tensions between Russia and Ukraine heighten worries over possible supply disruptions. Over the weekend, Russia launched its most significant airstrike on Ukraine in nearly three months. Moscow also stationed nearly 50,000 troops in Kursk, a southern Russian region. In addition, North Korea has sent thousands of its troops to Kursk as part of Russia's offensive. This move has raised alarm among US President Joe Biden and his advisers, with concerns that North Korea's involvement could usher in a perilous new phase in the conflict, according to CNN News. Moreover, CNN News reported on Sunday, citing two US officials, that President Joe Biden has authorized Ukraine to use the Army Tactical Missile Systems (ATACMS), powerful long-range American weapons, to carry out strikes within Russia. Additionally, crude Oil prices faced pressure as Federal Reserve Chair Jerome Powell dampened expectations for imminent rate cuts, highlighting the economy's resilience, a strong labor market, and ongoing inflationary pressures. Powell remarked, "The economy is not sending any signals that we need to be in a hurry to lower rates." Prolonged higher borrowing costs could negatively affect economic activity in the United States (US), the world’s largest Oil consumer. Meanwhile, concerns over weakening demand in China, the world’s largest Oil importer, have fueled bearish sentiment in the crude Oil market. The recent 10 trillion Yuan debt package in China, which lacked direct economic stimulus measures, has further intensified market worries. WTI Oil FAQs What is WTI Oil? WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media. What factors drive the price of WTI Oil? Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa. How does inventory data impact the price of WTI Oil The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency. How does OPEC influence the price of WTI Oil? OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Indian Rupee holds steady in Monday’s Asian session.Significant foreign outflows and Trump trades might drag the INR lower. The Fed’s Goolsbee is set to speak later on Monday. The Indian Rupee (INR) flat lines on Monday amid the modest decline in the US Dollar (USD). The renewed Greenback demand from investors and weakening of the Chinese Yuan are likely to keep pressure on the Iocal currency in the near term. Additionally, the unabated foreign fund outflows contribute to the INR's downside. 

The routine intervention by the Reserve Bank of India (RBI) by selling USD might help limit the Indian Rupee’s losses, though this has led to a drop in India's forex reserves. In the absence of top-tier Indian and US economic data releases due on Monday, the focus will remain on risk sentiment and the speech from US Federal Reserve (Fed) Austan Goolsbee.  Indian Rupee looks vulnerable amid multiple challenges The Indian Rupee is expected to be trading at 84.5 per US Dollar by the end of December this year, according to the median forecast of the Business Standard poll.  Moody's Ratings estimated the Indian economy to grow by 7.2% in 2024, driven by a gradual recovery in household spending and easing inflation pressures. The rating agency further projected growth rates of 6.6% and 6.5% in 2025 and 2026. "We remain negative on the outlook for Asian FX through H1 2025, given the potential negative economic impact of likely US tariff hikes," MUFG Bank said in a note. The US Retail Sales rose 0.4% in October, compared to 0.8% recorded in September (revised from 0.4%), the Commerce Department's Census Bureau revealed on Friday. This figure was stronger than the 0.3% expected.  Chicago Fed President Austan Goolsbee said on Friday that markets tend to overreact to interest rate changes and that the Fed should maintain a slow and steady approach to reaching the neutral rate. Boston Fed President Susan Collins noted that another rate cut in December is on the table, but it is not a "done deal," per Reuters.  The markets have priced in nearly 60% of the 25 basis points (bps) rate cut by the Fed at the December meeting, according to the CME FedWatch Tool.   USD/INR still maintains its constructive bias The Indian Rupee trades flat on the day. The longer-term uptrend of the USD/INR pair remains intact as the pair holds above the key 100-day Exponential Moving Average (EMA) on the daily chart. Nonetheless, the 14-day Relative Strength Index (RSI) exceeds 70, indicating an overbought condition. This suggests that additional consolidation cannot be ruled out before positioning for any near-term USD/INR appreciation. 

The resistance level to watch if buyers step in would be 84.50. A break above this barrier could pave the way for a test of the 85.00 psychological level.

On the other hand, the resistance-turned-support level at 84.35 acts as an initial support level for the pair. If the support level fails to hold, bears could push prices lower toward 84.00, the round mark. The additional downside threshold is seen at 83.88, the 100-day EMA. Indian Rupee FAQs What are the key factors driving the Indian Rupee? The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee. How do the decisions of the Reserve Bank of India impact the Indian Rupee? The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference. What macroeconomic factors influence the value of the Indian Rupee? Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee. How does inflation impact the Indian Rupee? Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.

 

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Ueda offered no cues about a December rate hike, which seems to have disappointed investors and weighed on the JPY. Apart from this, a generally positive risk tone is seen as another factor undermining demand for the safe-haven JPY. That said, speculations that Japanese authorities might intervene in the FX market to prop up the domestic currency hold back JPY bears from placing aggressive bets. This, along with subdued US Dollar (USD) price action, could act as a headwind for the USD/JPY pair and cap gains. Traders might also prefer to wait on the sidelines and look forward to BoJ Governor Ueda's media conference at 04:45 GMT for some meaningful impetus.  Japanese Yen attracts fresh sellers after BoJ Governor Ueda’s not-so-optimistic comments Bank of Japan Kazuo Ueda said this Monday that the central bank will continue to raise policy rates, adjust the degree of monetary support if the economy, and prices move in line with the forecasts. Ueda added that Japan's economy is recovering moderately albeit there are some weak signs, and that the timing of the rate hike will depend on economic, price, and financial outlook. Japan's Finance Minister Katsunobu Kato warned on Friday that the government will scrutinize the FX market with very high vigilance and take appropriate action against excessive moves. US President Joe Biden authorized Ukraine to use US-supplied long-range missiles to strike deeper inside Russia, raising the risk of a further escalation of geopolitical tensions. The US Dollar remains on the defensive following the post-US election rally to the year-to-date peak touched last Thursday, though any meaningful depreciation seems elusive.  Investors seem convinced that US President-elect Donald Trump's touted policies will be inflationary, which could limit the scope for further rate cuts by the Federal Reserve. Adding to this, the recent comments from influential FOMC members, including Fed Chair Jerome Powell, forced investors to scale back their bets for more aggressive rate cuts.  Powell said last Thursday that with the economy growing steadily, a strong job market, and inflation still above the 2% target, there’s no need to hurry into cutting interest rates.  Adding to this, Boston Fed President Susan Collins noted on Friday that there's no preset path for monetary policy and that the economy is in a very good place right now. Separately, Chicago Fed President Austan Goolsbee said that inflation numbers have to keep improving and that the recent CPI print has been a little higher than the target. The US Census Bureau reported on Friday that Retail Sales expanded by 0.4% in October, surpassing expectations for a 0.3% gain but down from September’s 0.8% increase. According to the CME Group's FedWatch Tool, traders are currently pricing in a 60% chance of another 25-basis-point rate cut by the Fed at the December monetary policy meeting.  Investors now look to BoJ Governor Ueda's press conference for cues about a possible December rate hike, which should infuse some volatility and drive demand for the JPY.  USD/JPY technical setup supports prospects for a move towards reclaiming the 156.00 markFrom a technical perspective, the USD/JPY pair once again showed some resilience below the 154.00 mark at the start of a new week. The subsequent move up, along with positive oscillators, favors bullish traders and supports prospects for a further intraday appreciating move. Acceptance above the 155.00 psychological mark will reaffirm the positive bias and pave the way for a move towards reclaiming the 156.00 round figure with some intermediate resistance near the 155.70 region.  On the flip side, the 153.85 zone now seems to have emerged as an immediate support, below which the USD/JPY pair could drop to the 153.25 region en route to the 153.00 mark and the next relevant support near the 152.70-152.65 area. A convincing break below the latter might expose the very important 200-day Simple Moving Average (SMA) resistance breakpoint, now turned support, currently pegged near the 151.85 region. Japanese Yen FAQs What key factors drive the Japanese Yen? The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. How do the decisions of the Bank of Japan impact the Japanese Yen? One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen. How does the differential between Japanese and US bond yields impact the Japanese Yen? Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential. How does broader risk sentiment impact the Japanese Yen? The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.  

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Bullock emphasized that current interest rates are sufficiently restrictive and will remain unchanged until the central bank is confident about the inflation outlook. Australia's 10-year government bond yield eased slightly to around 4.66%, retreating from a one-year high. Recent data indicated a slowdown in employment growth for October, while the unemployment rate held steady, highlighting the resilience of the labor market. Market focus now shifts to the release of the latest RBA meeting minutes on Tuesday, which could offer further insights into the central bank's policy stance. The AUD/USD pair’s upside could be restrained as the US Dollar (USD) may continue to strengthen, driven by recent hawkish remarks from Federal Reserve (Fed) officials and stronger-than-expected US economic data. Fed Chair Jerome Powell downplayed the likelihood of imminent rate cuts, highlighting the economy's resilience, robust labor market, and persistent inflationary pressures. Powell remarked, "The economy is not sending any signals that we need to be in a hurry to lower rates." Australian Dollar extends gains as RBA holds hawkish stance regarding policy outlook Federal Reserve Bank of Chicago President Austan Goolsbee remarked on Friday that markets often overreact to changes in interest rates. Goolsbee emphasized the importance of the Fed adopting a cautious, gradual approach in moving toward the neutral rate. Boston Fed President Susan Collins tempered expectations for continued rate cuts in the near term while maintaining market confidence in a potential rate reduction in December. Collins stated, "I don't see a big urgency to lower rates, but I want to preserve a healthy economy." The US Census Bureau reported on Friday that Retail Sales increased by 0.4% month-over-month in October, exceeding the market consensus of 0.3%. Additionally, the NY Empire State Manufacturing Index for November posted an unexpected surge, coming in at 31.2 compared to the anticipated 0.7 decline, signaling robust manufacturing activity. China’s Retail Sales rose 4.8% year-over-year in October, surpassing the expected 3.8% and the 3.2% increase seen in September. Meanwhile, Industrial Production grew by 5.3% YoY, below the forecasted 5.6% and the 5.4% growth recorded in the previous period. China's National Bureau of Statistics (NBS) shared its economic outlook during its press conference, noting an improvement in China's consumer expectations in October. The bureau plans to intensify policy adjustments and boost domestic demand, highlighting that recent policies have had a positive impact on the economy. The US Producer Price Index (PPI) rose by 2.4% year-over-year in October, up from a revised 1.9% increase in September (previously 1.8%) and surpassing market expectations of 2.3%. Meanwhile, the Core PPI, which excludes food and energy, climbed 3.1% YoY, slightly above the anticipated 3.0%. Australia’s seasonally adjusted unemployment rate held steady at 4.1% in October for the third month in a row, matching market expectations. However, employment change data revealed only 15.9K new jobs added in October, which fell short of the anticipated 25.0K. Australia's Consumer Inflation Expectations dropped to 3.8% in November, down from 4.0% in the previous month, reaching the lowest level since October 2021. Technical Analysis: Australian Dollar rises toward 0.6500 as RSI climbs from oversold zone AUD/USD hovers around 0.6470 on Monday, reflecting short-term downward pressure on the daily chart as the pair stays below the nine-day Exponential Moving Average (EMA). However, the 14-day Relative Strength Index (RSI) has begun climbing from the 30 level, indicating that selling pressure may be waning and hinting at the potential for an upward correction. On the downside, the AUD/USD pair may encounter significant support around the 0.6400 level. A breach of this psychological threshold could intensify downward pressure, potentially pushing the pair toward the yearly low of 0.6348, last seen on August 5. Immediate resistance for the AUD/USD pair is at the psychological level of 0.6500. A break above this could propel the pair toward the nine-day EMA at 0.6514, followed by the 14-day EMA at 0.6542. Clearing these EMAs could open the path for a move toward the three-week high of 0.6687. AUD/USD: Daily ChartAustralian Dollar PRICE Today The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Japanese Yen.   USD EUR GBP JPY CAD AUD NZD CHF USD   -0.03% -0.14% 0.31% -0.13% -0.27% -0.04% -0.05% EUR 0.03%   0.06% 0.47% 0.01% -0.09% 0.10% 0.10% GBP 0.14% -0.06%   0.41% -0.04% -0.15% 0.05% 0.03% JPY -0.31% -0.47% -0.41%   -0.45% -0.51% -0.29% -0.29% CAD 0.13% -0.01% 0.04% 0.45%   -0.11% 0.09% 0.08% AUD 0.27% 0.09% 0.15% 0.51% 0.11%   0.19% 0.18% NZD 0.04% -0.10% -0.05% 0.29% -0.09% -0.19%   0.00% CHF 0.05% -0.10% -0.03% 0.29% -0.08% -0.18% -0.00%   The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote). Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

Citing two US officials familiar with the decision, CNN News reported on Sunday that US President Joe Biden authorized Ukraine to use powerful long-range American weapons to strike inside Russia. The decision to allow the use of the Army Tactical Missile Systems, or ATACMS, inside Russia came after Moscow deployed nearly 50,000 troops to Kursk, the southern Russian region. It is also worth mentioning that North Korea has deployed thousands of its troops to Kursk as part of Russia’s offensive, sparking concern from Biden and his advisers that their entry could lead to a dangerous new phase in the war, per CNN News. “The change comes largely in response to Russia's deployment of North Korean ground troops to supplement its own forces, a development that has caused alarm in Washington and Kyiv,” Reuters reported, citing a US official and a source familiar with the decision. In response, Ukrainian President Volodymyr Zelenskiy said, “today, many in the media are saying that we have received permission to take appropriate actions.” "But strikes are not made with words. Such things are not announced,” he added.

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Will increase interest rates upon realization of strong economic outlook.

To increasingly raise policy rate to adjust monetary support in line with economic and price forecasts.

Monitoring effects of various risks on economic outlook.

Sees moderate increase in private consumption trend.

Maintains stance to support economic activity.

Sees rise in income in both corporate and household sectors.

Gradually adjusting monetary support will help achieve price target through sustained economic growth.

Must monitor various risks, including US economy.

Increase in spending is gradually intensifying virtuous cycle.

To monitor wage negotiations in the future.

Sees executives of large firms announce commitment to sustained wage growth.

Firms should pass on higher labor costs through price hikes.

Gradual adjustment to easing to aid inflation goal.

Long-term inflation expectations embedded among households and firms.

Supports firm monetary policy to boost the economy.

Projects strengthening inflationary pressure from wage increases.

High uncertainty over future growth pace in China. Expects underlying inflation to continue rising moderately.

To focus on outlook of wage negotiations and how increased wages will affect inflation.

It is crucial to achieve a sustained increase in real wages, such as by raising productivity.

Sees increasing likelihood of soft landing.

Need to monitor US economy carefully.

Cautions volatile markets based on economic data and geopolitical risks.

Underlying inflation expected to moderately increase.

High uncertainty over China's growth rate.

Japan's economy and prices remain vulnerable to volatile market moves. Market reaction to the BoJ’s Ueda speech At the time of writing, USD/JPY is trading 0.46% higher on the day to trade at 155.01. Bank of Japan FAQs What is the Bank of Japan? The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%. What has been the Bank of Japan’s policy? The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance. How do Bank of Japan’s decisions influence the Japanese Yen? The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance. Why did the Bank of Japan decide to start unwinding its ultra-loose policy? A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.  

On Monday, the People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead at 7.1907, as compared to Friday's fix of 7.1992 and 7.2312 Reuters estimates.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}EUR/USD appreciates despite a negative bias amid the cautious US Federal Reserve.Fed Chair Powell stated that the economy is not sending any signals that we need to lower rates quickly.The headline inflation in the Euro Area is projected to drop sharply to 2.4% in 2024, from 5.4% in 2023.The EUR/USD pair trades around 1.0550 during Monday’s Asian trading session, hovering near its yearly low of 1.0496, which was reached on November 14. Downside risks for the pair have intensified following cautious comments from Federal Reserve (Fed) officials and stronger-than-expected US Retail Sales data, broadly supporting the US Dollar (USD). Last week, Fed Chair Jerome Powell tempered expectations for imminent rate cuts, emphasizing the economy's resilience, a strong labor market, and persistent inflationary pressures. Powell stated, "The economy is not sending any signals that we need to be in a hurry to lower rates." The CME FedWatch Tool indicates that markets are pricing in nearly a 60% probability of a 25-basis-point rate cut by the Fed at its December meeting. The US Census Bureau reported on Friday that Retail Sales increased by 0.4% month-over-month in October, exceeding the market consensus of 0.3%. Additionally, the NY Empire State Manufacturing Index for November posted an unexpected surge, coming in at 31.2 compared to the anticipated 0.7 decline, signaling robust manufacturing activity. The Euro faces continued downward pressure as the European Central Bank (ECB) maintains a dovish stance, with a policy rate cut expected at its upcoming December meeting. Headline inflation in the Euro Area is projected to drop sharply to 2.4% in 2024, down from 5.4% in 2023, before easing more gradually to 2.1% in 2025 and 1.9% in 2026. The European Commission's Autumn 2024 forecast projects 0.8% growth for the Euro Area in 2024, unchanged from the Spring forecast. However, the 2025 growth forecast has been revised slightly downward to 1.3% from 1.4%, while the Eurozone economy is projected to grow by 1.6% in 2026. EU Economy Commissioner Paolo Gentiloni stated, "As inflation continues to ease and growth in private consumption and investment gains momentum, alongside record-low unemployment, growth is expected to gradually accelerate over the next two years." Euro FAQs What is the Euro? The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%). What is the ECB and how does it impact the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. How does inflation data impact the value of the Euro? Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money. How does economic data influence the value of the Euro? Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy. How does the Trade Balance impact the Euro? Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}NZD/USD gains ground to around 0.5875 in Monday’s early Asian session. New Zealand’s PPI Input and Output were stronger than expected in Q3;  Business NZ PSI improved in October. Strong US data and muted expectations for US rate cuts might cap the pair’s upside. The NZD/USD pair trades in positive territory near 0.5875 on Monday during the early Asian session. The pair edges higher on the stronger-than-expected New Zealand economic data and the consolidation of the Greenback. 

Data released by Statistics New Zealand on Monday showed that New Zealand’s Producer Price Index (PPI) Input climbed 1.9% QoQ in the third quarter (Q3), compared to 1.4% in the previous reading. Meanwhile, the PPI Output rose 1.5% QoQ in Q3 versus 1.1% prior. Both figures came in better than the estimations. Additionally, the Business NZ Performance of Services Index (PSI) improved to 46.0 in October from 45.7 in September. The upbeat economic data provides some support to the New Zealand Dollar (NZD) against the US Dollar (USD). 

However, the upside for the Kiwi might be limited as President-elect Donald Trump has threatened to implement 60% tariffs on exports from China as he seeks to protect US companies and jobs. The likely negative spillovers from Trump’s policies might drag the NZD lower as China is a major trading partner for New Zealand. 

On the USD’s front, the solid economic performance and the cautious tones from the US Federal Reserve (Fed) reduced the expectations for a rate reduction at the central bank's upcoming FOMC meeting in December, lifting the USD. Futures markets hint at 60% odds of a Fed rate cut in December, though expectations for rate cuts through 2025 have moderated to 77 basis points (bps). New Zealand Dollar FAQs What key factors drive the New Zealand Dollar? The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD. How do decisions of the RBNZ impact the New Zealand Dollar? The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair. How does economic data influence the value of the New Zealand Dollar? Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate. How does broader risk sentiment impact the New Zealand Dollar? The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}GBP/USD ticks higher at the start of a new week amid a modest USD downtick.The Trump trade optimism should limit the USD downside and cap the major.The BoE uncertainty could also contribute to capping the upside for the GBP.The GBP/USD pair kicks off the new week on a subdued note and consolidates in a range above the 1.2600 round-figure mark, or the lowest level since mid-May touched on Friday. Spot prices, for now, seem to have snapped a six-day losing streak amid a modest US Dollar (USD) downtick, though the fundamental backdrop supports prospects for an extension of the recent well-established downtrend. The USD remains on the defensive below the year-to-date (YTD) top set last Thursday as bulls pause for a breather following the post-US election blowout rally. Any meaningful USD depreciation, however, seems elusive in the wake of expectations that US President-elect Donald Trump's policies will likely rekindle inflationary pressures and limit the scope for further rate cuts by the Federal Reserve (Fed). This has been a key factor behind the recent upsurge in the US Treasury bond yields, which suggests that the path of least resistance for the USD is to the upside.  The British Pound (GBP), on the other hand, might struggle to lure buyers on the back of the uncertainty concerning the Bank of England's (BoE) path forward on interest rates. Data released last week showed that UK wage growth excluding bonuses cooled in September and the unemployment rate to 4.3% from 4.1%. Furthermore, the UK GDP unexpectedly contracted for the first time in five months in September, increasing expectations for BoE rate cuts. That said, BoE members do not see the central bank cutting interest rates at the December policy meeting. This, in turn, makes it prudent to wait for strong follow-through buying to confirm that the GBP/USD pair has formed a near-term bottom. Bearish traders, however, might now wait for a sustained break and acceptance below the 1.2600 round figure before placing fresh bets amid absent relevant market-moving economic releases on Monday, either from the UK or the US. Pound Sterling FAQs What is the Pound Sterling? The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE). How do the decisions of the Bank of England impact on the Pound Sterling? The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects. How does economic data influence the value of the Pound? Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall. How does the Trade Balance impact the Pound? Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}} European Central Bank (ECB) board member Piero Cipollone said on Friday that central bank should cut interest rates further to support the recovery in the Eurozone and also in the face of potential new trade tariffs in the US, per Reuters. Key quotes The pace and extent of reduction will depend on data. Developments remain consistent with a consumption-led recovery. Whether the recovery will firm up remains to be confirmed. We should not be more restrictive than what is necessary to ensure timely convergence of inflation to target. It could be self-defeating to tolerate an economy running persistently below potential as an insurance against possible future inflationary shocks. Market reaction At the time of writing, EUR/USD is trading 0.08% higher on the day at 1.0535. ECB FAQs What is the ECB and how does it influence the Euro? The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde. What is Quantitative Easing (QE) and how does it affect the Euro? In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic. What is Quantitative tightening (QT) and how does it affect the Euro? Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.  

.fxs-faq-module-wrapper{border:1px solid #dddedf;background:#fff;margin-bottom:32px;width:100%;float:left;font-family:Roboto,sans-serif}.fxs-faq-module-title{color:#1b1c23;font-size:16px;font-style:italic;font-weight:700;line-height:22.4px;text-transform:uppercase;background:#f3f3f8;padding:8px 16px;margin:0}.fxs-faq-module-container{padding:16px;width:100%;box-sizing:border-box;display:flex;flex-direction:column;gap:12px}.fxs-faq-module-section{padding-bottom:16px;border-bottom:1px solid #ececf1;margin-bottom:0}.fxs-faq-module-section:last-child{border:none;margin-bottom:0}.fxs-faq-module-container input[type=checkbox]{display:none}.fxs-faq-module-header{padding:4px 0;background-color:#fff;border:none;position:relative;cursor:pointer;margin:0}.fxs-faq-module-header label{display:block;cursor:pointer}.fxs-faq-module-header label span{display:block;width:calc(100% - 50px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{content:"";position:absolute;top:50%;right:16px;width:8px;height:2px;background-color:#49494f;transition:all .2s ease-in-out;transition-delay:0}.fxs-faq-module-header label:after{transform:rotate(45deg) translateX(-4px)}.fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(4px)}.fxs-faq-module-header label:after,.fxs-faq-module-header label:before{transition:transform .3s ease-in-out}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:after{transform:rotate(45deg) translateX(4px)}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-header label:before{transform:rotate(-45deg) translateX(-4px)}.fxs-faq-module-content{max-height:0;overflow:hidden;transition:all .3s ease-in-out;color:#49494f;font-weight:300;padding:0;font-size:14.72px;line-height:20px;margin:0}input[type=checkbox]:checked+.fxs-faq-module-section .fxs-faq-module-content{max-height:1000px;margin-top:8px}@media (min-width:680px){.fxs-faq-module-title{font-size:19.2px;line-height:27.2px}.fxs-faq-module-header{font-size:19.2px;line-height:25.92px}.fxs-faq-module-content{font-size:16px;line-height:21.6px}}The Gold price attracts some buyers to around $2,570 in Monday’s early Asian session. Traders wind back expectations for a Fed rate cut in December, weighing on the yellow metal.Geopolitical risks could boost the Gold price, a traditional safe-haven asset. The Gold price (XAU/USD) rebounds to near $2,570, snapping the six-day losing streak during the early Asian trading hours on Monday. However, the strength of the US Dollar (USD) might cap the upside for the precious metal.  The Greenback rally in the wake of Donald Trump's election win could exert some selling pressure on the USD-denominated Gold price. The expectations of higher inflation next year due to Donald Trump’s policies have led to fewer expected rate cuts. 

Furthermore, traders pared back expectations for lower rates in December after Fed Chair Jerome Powell said that the US central bank would be in no rush to cut, citing the “remarkably good” performance of the economy. Higher interest rates generally drag the Gold price lower, as it makes holding non-yielding assets like gold less appealing.

On the other hand, the rising geopolitical tensions in the Middle East and the ongoing conflict between Ukraine and Russia could boost the safe-haven flows, benefiting the yellow metal. President Joe Biden's administration has allowed Ukraine to use US arms to strike inside Russia in a significant reversal of Washington's policy in the Ukraine-Russia conflict, per Reuters.  Gold FAQs Why do people invest in Gold? Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government. Who buys the most Gold? Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves. How is Gold correlated with other assets? Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal. What does the price of Gold depend on? The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
 

 

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The US Retail Sales increased slightly more than expected in October, according to the Commerce Department's Census Bureau on Friday. Retail sales rose 0.4% in October versus 0.8% prior (revised from 0.4%), above the market consensus of 0.3%. 

Traders reduced their expectations for a Fed rate reduction in December. Fed Chair Jerome Powell said last week that "the economy is not sending any signals that we need to be in a hurry to lower rates.” According to the CME FedWatch Tool, the markets have priced in nearly 60% of the 25 basis points (bps) rate cut by the Fed at the December meeting. 

On the Aussie front, the hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock could provide some support for the Australian Dollar (AUD). The RBA reiterated that “the Board is not ruling anything in or out” and that there is “the need to remain vigilant to upside risks to inflation.” Investors will keep an eye on the RBA minutes, which will be released on Tuesday.  Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.