Dollar stands tall after SNB cut and BoE’s dovish hold. Yen enters
intervention zone as Japan’s underlying inflation falls. Euro slips on weak
PMIs, US PMIs next in focus. Nasdaq tumbles as Nvidia hit by profit taking
ahead of triple witching.
Risk Warning: Our services involve a significant risk and can result in the loss of your invested capital. *T&Cs apply.
Please consider our Risk Disclosure: https://www.xm.com/goto/risk/en
Risk warning is correct at the time of publication and may change. Please check our Risk Disclosure for an up to date risk warning
Receive your daily market and forex news analysis directly from experienced forex and market news analysts! Tune in here to stay updated on a daily basis: https://www.xm.com/weekly-forex-review-and-outlook
In-depth forex news analysis on all major currencies, such as EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD.
Welcome to another episode of Global Market Insights, brought to you by XM.com, where we provide meaningful and informative content about the events that affect market trends and shape global markets. It's Friday the 21st of June, 2024, and you're listening to the Market Common Podcast by Rafi Boyajian. I'm Marie Eppesher to these, thanks for joining us at XM.com. The U.S. dollar looks set to finish the week higher, extending its winning streak to a third week. Whilst signs of a cool-down and inflationary pressures, as well as the broader economy, have bolstered expectations that the Federal Reserve may be able to deliver two rate cuts after all in 2024, with the first aid in September, other central banks appear to be ahead in the race to ease policy. The Swiss national bank cut its policy rate on Thursday for the second meeting in a row, becoming the third central bank this month to do so. The Bank of England kept its borrowing costs unchanged yesterday, but the minutes reveal that the decision was finally balanced, opening the door to a cut in August when the UK general election will be out of the way. The Swiss Franc, which had been on a bullish run since late May, sank against its major peers, while the pound slipped to one-month lows against the dollar, extending its slide today as upbeat UK retail sales were offset by soft PMIs. Even if the incoming US data continues to go in the right direction, and the Fed cuts in September, it will be among the last to begin its easing cycle, and this is keeping the dollar supported. Rocked by political turmoil in France, the euro has been having a terrible month, propped up only by diminishing bets of back-to-back rate cuts by the ECB. However, Dovish expectations got a boost today by a shock plunge in the Eurozone's flash PMI readings for June. The composite PMI for the euro area fell to the lowest since March, pushing the single currency back below $1.07. It hasn't been a good month for the yen either, as the Japanese currency is facing renewed selling pressure. The Bank of Japan's decision to postpone an announcement on bond tapering until the July meeting was perceived as a dovish move, despite governor's way to suggesting that a rate hike is possible next month. But markets aren't convinced with today's CPI figures reinforcing those doubts. A measure of CPI that excludes all volatile items fell to 1.7 percent in June, even as core CPI that only excludes fresh foods, accelerated to 2.5 percent. The dollar briefly popped above 1.59 yen following the data, prompting the usual intervention warning by Japan's top currency official, Masato Kanda. Their focus is now on the S&P global PMIs for the US due at 1345 GMT. Any unexpected slowdown in the US economy could spark some jitters after yesterday's large drop in housing starts raised some concerns. But investors will be hoping to see moderation in price pressures, which would be positive for risk sentiment. With Wall Street hit by profit-taking after almost uninterrupted gains during June, there is a risk of some further volatility on Friday, as it's that time of the quarter when stock options, stock index futures and stock index options all expire on the same day, a phenomenon called triple-witching. Nvidia and Apple were among the biggest losers among the mega-caps on Thursday, dragging the Nasdaq 100 lower by 0.8 percent. The sell-off appears to be undermining risk appetite today, with equities slipping globally and oil futures pairing some of the weak strong gains. Thanks for listening. This was today's market comment here at XM.com. Thank you for listening to another episode of Global Market Insights brought to you by XM.com. For more in-depth technical and fundamental analysis, be sure to visit www.xm.com/research. [BLANK_AUDIO]
