Forex Today: BoE policy in focus, Hawkish Fed policymakers keep US Dollar firm

Source Fxstreet

Here is what you need to know on Thursday, May 9:

The US Dollar (USD) exhibits strength against its rivals in Thursday’s early London session as Federal Reserve (Fed) policymakers remain convinced about resilient United States economic prospects and lacks confidence over inflation declining to the desired rate of 2%.

On Wednesday, Boston Fed Bank President Susan Collins said the economy needs to cool down for inflation return to 2. Collins said recent upward surprises in price pressures and economic activity suggests that interest rates should remain at their current levels until they get greater confidence that inflation will sustainably return to 2%.

Interest rates by the Fed remaining higher for a longer period is a favorable scenario for the US Dollar and bond yields. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, clings to gains near 105.50. 10-year US Treasury yields jump to 4.51%.

In the Asian trading hours, hawkish guidance on interest rates from Bank of Japan’s (BoJ) Summary of Opinions (SOP) failed to impact strength in the USD/JPY pair. The major looks set to extend its upside towards 156.00. BoJ policymakers flagged upside risks to inflation and discussed possible rate hike scenarios. However, investors see little scope for more hikes amid less confidence over sustained wage growth.

US Dollar PRICE Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Euro.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   -0.06% -0.11% -0.12% -0.08% -0.12% -0.09% -0.07%
EUR 0.06%   -0.04% -0.07% -0.01% -0.04% -0.00% -0.00%
GBP 0.11% 0.04%   0.00% 0.02% 0.00% 0.03% 0.05%
JPY 0.12% 0.07% 0.00%   0.06% -0.00% 0.07% 0.08%
CAD 0.08% 0.00% -0.02% -0.06%   -0.03% -0.00% 0.00%
AUD 0.12% 0.04% -0.01% 0.00% 0.03%   0.03% 0.04%
NZD 0.09% 0.00% -0.03% -0.07% 0.00% -0.03%   0.01%
CHF 0.07% 0.00% -0.05% -0.08% -0.01% -0.04% -0.01%  

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).

EUR/USD seems feeble near 1.0740. The pair falls on backfoot amid firm US Dollar. The major currency pair is expected to be driven by market sentiment due to absence of top-tier Eurozone economic data.

GBP/USD trades close to weekly low below 1.2500 amid caution ahead of the Bank of England’s (BoE) interest rate decision. The BoE is widely anticipated to keep interest rates steady at 5.25% for the sixth time in a row. Therefore, major focus of investors will be on fresh cues about when it could start reducing interest rates. BoE Deputy Governor Dave Ramsden remained confident over inflation returning to 2% and staying there for next three years. He is expected to join policymaker Swati Dhingra and vote for a rate cut.

Gold price rises to $2,315. The precious metal is broadly sideways in the $2,300-$2,320 range. The downside remains supported due to geopolitical uncertainty while higher bond yields maintain downside pressure.

Gold price gains momentum, investors await US data, Fedspeak for fresh catalyst

AUD/USD remains on backfoot near 0.6570 due to weakness in the Australian Dollar. The antipodean is under pressure as the Reserve Bank of Australia (RBA) doesn’t think that it is necessary to tighten policy further. The RBA could get inflation back to 2% with current level of interest rates.

Australian Dollar edges higher after Chinese import data shows rise in April

Economic Indicator

BoE Interest Rate Decision

The Bank of England (BoE) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoE is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Pound Sterling (GBP). Likewise, if the BoE adopts a dovish view on the UK economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for GBP.

Read more.

Next release: Thu May 09, 2024 11:00

Frequency: Irregular

Consensus: 5.25%

Previous: 5.25%

Source: Bank of England

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
US October PPI Preview: Fed Rate Hike Expectations Rise, PPI May Be Key Variable; How Will US Stocks, Dollar, and Gold Move?On Friday (Nov. 13) Eastern Time, the U.S. will release the October Producer Price Index (PPI). Following the October CPI once again exceeding expectations, the market will look to the PP
Author  TradingKey
13 hours ago
On Friday (Nov. 13) Eastern Time, the U.S. will release the October Producer Price Index (PPI). Following the October CPI once again exceeding expectations, the market will look to the PP
placeholder
Gold closed below $4,000 again — the ETF crowd and central banks stayed, the momentum money leftSpot gold is trading near $3,999, its third consecutive lower daily low, after a 5.00% 10-year yield and a 102.85 dollar index raised the odds of a December hike to 87%. But the selling is not coming from the strategic holders: managed-money net longs fell to 324 tonnes, a 21-week low, and Goldman Sachs attributes roughly 95% of five weeks of selling to non-reportable positions. ETFs still hold a record 4,256 tonnes and central banks bought 321 tonnes in Q3. The table below sets the triggers, directions and levels.
Author  Irene Q.
18 hours ago
Spot gold is trading near $3,999, its third consecutive lower daily low, after a 5.00% 10-year yield and a 102.85 dollar index raised the odds of a December hike to 87%. But the selling is not coming from the strategic holders: managed-money net longs fell to 324 tonnes, a 21-week low, and Goldman Sachs attributes roughly 95% of five weeks of selling to non-reportable positions. ETFs still hold a record 4,256 tonnes and central banks bought 321 tonnes in Q3. The table below sets the triggers, directions and levels.
placeholder
Nvidia slid 7.7% after hours while AMD and Broadcom rose — the AI trade changed hands, it didn't breakNvidia closed Wednesday at 173.73, up 2.87%, then fell as much as 8.1% to 159.44 after reports that its board was preparing for a possible leadership change. The same session, the Philadelphia Semiconductor Index rose 5.7% with all 30 components higher, CoreWeave jumped 24.7% on 168% revenue growth, and Micron added 11.9%. If AI demand were being repriced, AMD and Broadcom would not be bid. This is a governance discount on one name, and 204.54 — the 200-day average — is the level that settles it.
Author  Irene Q.
18 hours ago
Nvidia closed Wednesday at 173.73, up 2.87%, then fell as much as 8.1% to 159.44 after reports that its board was preparing for a possible leadership change. The same session, the Philadelphia Semiconductor Index rose 5.7% with all 30 components higher, CoreWeave jumped 24.7% on 168% revenue growth, and Micron added 11.9%. If AI demand were being repriced, AMD and Broadcom would not be bid. This is a governance discount on one name, and 204.54 — the 200-day average — is the level that settles it.
placeholder
Gold Extends Slide Below $4,000 as Rising US Inflation, Fed December Hike Bets Pressure Prices On November 12, gold prices (XAUUSD) extended their recent losses, falling further below $4,000 in early Asian trading to hit an intraday low near $3,968, marking a third consecutive day
Author  TradingKey
19 hours ago
On November 12, gold prices (XAUUSD) extended their recent losses, falling further below $4,000 in early Asian trading to hit an intraday low near $3,968, marking a third consecutive day
placeholder
Bitcoin lost its 200-day average — but the exit started three sessions before the CPIBitcoin fell 2.5% to about $73,400 on 11 November, an 11-week low, breaking its 200-day moving average near $73,100. The 24-hour liquidation tally reached $632 to $705 million, roughly 82% of it longs. But spot ETF outflows began three sessions earlier and USDT's market cap has shrunk $6.6 billion in 60 days — the leveraged length left before the inflation print did. A double top at 81,890 and 81,080 leaves a measured target of 69,366.
Author  Suzie
Yesterday 03: 22
Bitcoin fell 2.5% to about $73,400 on 11 November, an 11-week low, breaking its 200-day moving average near $73,100. The 24-hour liquidation tally reached $632 to $705 million, roughly 82% of it longs. But spot ETF outflows began three sessions earlier and USDT's market cap has shrunk $6.6 billion in 60 days — the leveraged length left before the inflation print did. A double top at 81,890 and 81,080 leaves a measured target of 69,366.
goTop
quote