USDCHF: the US dollar awaits a chance to strengthen

The release of Switzerland’s CPI and GDP data and the US PMI data may help the US dollar strengthen its position. Find out more in our analysis dated 3 September 2024.

USDCHF forecast: key trading points

• Switzerland’s Consumer Price Index (m/m) for August: previously at -0.2%, projected at 0.1%

• Switzerland’s GDP (q/q): previously at 0.5%, projected at 0.5%

• US manufacturing PMI: previously at 49.6, projected at 48.0

• USDCHF forecast for 3 September 2024: 0.8572

Fundamental analysis

The Consumer Price Index reflects the dynamics of consumer prices for goods and services. Investors view a higher-than-expected reading as a positive factor for economic health, while a weaker-than-expected reading is considered negative.

For August, Switzerland’s Consumer Price Index (m/m) is projected to return to positive territory. The previous reading was -0.2%, while a forecast for 3 September 2024 is optimistic, suggesting 0.1%. A stronger-than-expected actual CPI reading may strengthen the Swiss franc.

GDP reflects the aggregate value of all goods and services produced in a country (only end products are considered, excluding the costs of raw materials). Switzerland releases quarterly GDP changes in percentage terms, demonstrating the economy’s comprehensive dynamics.

Analysis for 3 September 2024 suggests that the GDP reading may remain flat at 0.5%, and the actual figure will show whether expectations are realised. An increase in the indicator may help strengthen the Swiss franc against the US dollar, while a decrease in GDP will drive further growth in the USDCHF rate.

The US manufacturing PMI evaluates the activity of purchasing managers in the industrial sector, reflecting the state and the dynamics of industrial processes. According to a preliminary estimate, the index is expected to decrease to 48.0 points. Given that figures have been decreasing for the past several months, the actual reading in the current period may be equal to or below the projected value.

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USDJPY heads down: demand for the yen has risen significantly

The USDJPY pair is losing ground. The market favours the yen as a safe-haven asset. Discover more in our analysis for 5 September 2024.

USDJPY forecast: key trading points

• The USDJPY pair fell to a two-month low

• Japan’s robust domestic statistics and weak US reports are supporting the yen

• USDJPY forecast for 5 September 2024: 141.46

Fundamental analysis

The USDJPY rate halted its decline near the 143.69 level.

The pair is hovering near a two-month low after an active two-day sell-off. The yen’s strength is now based on the latest statistics from Japan. Data showed that real wages in the country rose in July for the second consecutive month, adding 0.4% y/y. Overall cash earnings increased by 3.6%.

This aligns with the Bank of Japan’s forecast for moderate economic growth rates. Additionally, such data supports expectations of wage increases, which will lead to higher overall inflation.

In addition to domestic statistics, the yen benefitted from growing market demand for safe-haven assets following the release of relatively weak US statistics. The figures reminded investors of a potential recession in the US economy, which boosted demand for safe-haven assets. The USDJPY forecast suggests local growth in the yen.

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Gold (XAUUSD) remains in a sideways range; the market awaits US inflation statistics

The XAUUSD price has been trading in a sideways range for three weeks; the direction of the price movement out of the range may determine the future trend. The market will focus on US inflation data this week. Find out more in our XAUUSD analysis for today, 9 September 2024.

XAUUSD forecast: key trading points

• Market focus: market participants are awaiting US inflation statistics this week

• Current trend: gold is consolidating within a sideways range

• XAUUSD forecast for 9 September 2024: 2,532 and 2,470

Fundamental analysis

Friday’s US employment market statistics aligned with the forecasts, with nonfarm payrolls showing growth of 142,000 and the unemployment rate declining to 4.2%. US stock indices responded to this data with a fall, and gold also corrected downwards from its annual high of 2,532 USD to 2,500 USD.

Market participants will focus on US inflation statistics this week, with the Consumer Price Index (CPI) and the Producer Price Index (PPI) scheduled for release. A decline in inflation will exert pressure on the USD and help strengthen gold. Conversely, a rise in inflation will support the US dollar, potentially causing XAUUSD quotes to fall.

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USDCAD: the US dollar continues to strengthen

The US consumer price index at last year’s level and the rest of the fundamental data package may further drive the USDCAD pair. Discover more in our analysis for 11 September 2024.

USDCAD forecast: key trading points

• The Thomson Reuters/Ipsos primary consumer sentiment index in Canada (PCSI): previously at 50.06

• The US consumer price index (m/m) for August: previously at 0.2%, projected at 0.2%

• The US consumer price index (y/y) for August: previously at 2.9%, projected at 2.5%

• USDCAD forecast for 11 September 2024: 1.3700

Fundamental analysis

The primary consumer sentiment index is calculated by Thomson Reuters/Ipsos and measures consumer sentiment based on a target group survey. The index increased to 50.06 last month, indicating positive consumer sentiment. The forecast for 11 September 2024 may be disappointing for the Canadian dollar, with the USDCAD rate continuing its ascent after a correction.

The expected fundamental news for the USDCAD pair may be called neutral. According to analytical forecasts, almost all data may be released in line with expectations or with minor deviations.

There is a package of US news, including year-over-year and month-over-month consumer price indices for August. They reflect changes in consumer goods and services prices and are key indicators for the direction of purchases and US inflation. Readings below the forecast are considered negative for the US dollar, while those above are considered positive.

The forecast suggests that the CPI index may remain flat at 0.2% month-over-month and slightly decrease to 2.5% year-over-year. Expectations that the estimates will align with actual data are so far low. An increase in indicators may further boost the USDCAD pair.

Despite the news, the USDCAD forecast for 11 September 2024 appears positive for the US dollar as it may strengthen its position against the Canadian dollar. Actual data aligning with the forecast may also drive growth in the pair.

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USDJPY at annual lows: this is not the end yet

The USDJPY pair continues to fall. The Japanese yen has risen to new highs. Find out more in our analysis for 13 September 2024.

USDJPY forecast: key trading points

• The USDJPY pair declines rapidly

• The yen receives support from the Bank of Japan’s hawkish statements

• USDJPY forecast for 13 September 2024: 139.70 and 137.77

Fundamental analysis

The USDJPY rate fell to 140.99 on Friday, marking another annual low. This became possible due to the hawkish comments from a Bank of Japan member. Yesterday, Bank of Japan Policy Board member Naoki Tamura said that the regulator should raise short-term interest rates to 1.00% by fiscal 2026 to reach the inflation target of 2.00%.

This is not the only strong statement in recent days. Junko Nakagawa has previously noted that the Bank of Japan is ready to hike interest rates further. This will be relevant if the economy and inflation align with forecasts.

Rating agency Fitch revised its interest rate expectations. The borrowing cost is now projected at 0.50% by the end of 2024, 0.75% by the end of 2025, and 1.00% by the end of 2026.

The yen has benefited from the global weakening of the US dollar. The USDJPY forecast suggests further sell-offs in the pair.

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EURUSD: expectations for a 50-basis-point Fed interest rate cut are growing

The EURUSD rate is correcting after declining for three consecutive sessions, with losses exceeding 1.19%. Discover more in our analysis for 17 September 2024.

EURUSD forecast: key trading points

• The likelihood of a 50-basis-point Federal Reserve interest rate cut is 69%, while the odds of a 25-basis-point rate reduction is 31%

• Investors are awaiting data on US retail sales and industrial production today, which are projected to decrease slightly

• Some analysts believe the US economy continues to grow, which may support the US dollar

• EURUSD forecast for 17 September 2024: 1.1115 and 1.1026

Fundamental analysis

The EURUSD rate continues to test the 1.1130 level, with the US dollar remaining under pressure as investors await the crucial Federal Reserve meeting, where interest rates are expected to be cut for the first time since 2020.

The markets have already priced in a possible 25-basis-point Federal Reserve interest rate cut. However, expectations are rising for a more significant 50-basis-point cut. According to the CME FedWatch tool, the likelihood of this event currently stands at 69%, up from 59% a day ago. The odds of a more modest 25-basis-point cut are estimated at 31%.

Today, investors are awaiting the release of US retail sales and industrial production data to better assess the state of the economy. Forecasts suggest a slight decrease in the figures. According to some analysts, the US economy continues to grow, outperforming most other countries; hence, the US currency is not expected to weaken sharply.

Nevertheless, BNP Paribas experts believe the situation may change if the US economy begins to slow down. In case of a possible recession, the Federal Reserve will likely lower interest rates more aggressively than other central banks, which may weaken the US dollar and increase its vulnerability.

As shown by Goldman Sachs research, the US dollar typically strengthens if rates are reduced amid economic growth. It is also noted that the US currency shows strong positions if the Federal Reserve cuts rates simultaneously with other central banks. In the current situation, several major central banks are cutting rates, which may positively impact the US dollar movements as part of today’s EURUSD forecast.

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USDJPY: markets await the Bank of Japan's decision

The USDJPY rate is correcting after rebounding from the 143.40 resistance level. Find out more in our analysis for 19 September 2024.

USDJPY forecast: key trading points

• Jerome Powell’s comments: further large interest rate cuts will not be the new standard

• US economic data expectations: focus on initial jobless claims and existing home sales

• The Bank of Japan decision: the current interest rate is expected to remain unchanged on Friday, but signals of future hikes are possible

• Japan’s inflation data: the core CPI is projected to decrease to 2.5%, potentially affecting BoJ’s further actions

• USDJPY forecast for 19 September 2024: 141.30, 139.10, and 137.77

Fundamental analysis

Investors, who expected sharp fluctuations in the USDJPY rate after the US Fed interest rate cut, saw a more restrained reaction. The US dollar rate strengthened on comments from Federal Reserve Chair Powell that the regulator does not intend to rush to ease monetary policy and that a 50-basis-point rate cut will not become a regular occurrence. However, analysts believe the relative calm will not last long, with the markets likely to face unexpected fluctuations in the coming hours as rate expectations in other economies intensify.

Investors will now be closely watching the upcoming US economic data, including initial jobless claims and existing home sales. Initial jobless claims are expected to decrease from 230,000 to 226,000. Such a slight reduction may signal stability in the employment market, which is a significant indicator for assessing the state of the US economy. Existing home sales are also projected to fall from 3.95 million to 3.91 million homes. The slowdown in the real estate market may be due to elevated interest rates, which make mortgage loans more expensive, reducing demand for home purchases.

The Bank of Japan's monetary policy decision will also be in the spotlight on Friday and may significantly change today’s USDJPY forecast. The regulator is expected to maintain current monetary policy parameters, keeping the interest rate unchanged. However, the BoJ may signal potential future rate hikes, especially if inflation and economic indicators change noticeably. Investors are also keeping a close eye on Japan’s inflation data for August, which is due on Friday. The core CPI is projected to fall to 2.5%. This will indicate easing inflation, which will reduce the pressure on the BoJ when making further decisions.

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USDJPY rises: investors are uncertain about the Bank of Japan's position

The USDJPY pair is continuing to rise. The yen lost more than 2% last week. Read more in our analysis for 23 September 2024.

USDJPY forecast: key trading points

• USDJPY is steadily rising

• The yen is under pressure from the Bank of Japan's indecision

• USDJPY forecast for 23 September 2024: 145.55 and 146.76

Fundamental analysis

USDJPY rose to 144.35 on Monday.

Thus, the yen is extending last week's losses amid market confidence that the BoJ will not be too quick to raise the interest rate. An earlier BoJ meeting ended with the BoJ keeping borrowing costs unchanged at 0.25% p.a.

At the same time, BoJ Governor Kazuo Ueda acknowledged some weakness in the economy. His tone was softer than at previous meetings, undermining the prospect of a rate hike at the October meeting. That said, investors still expect to see a rate hike at the December meeting.

The yen also faced external pressure. After the US Fed reduced its rate, risk appetite increased. The forecast for USDJPY looks positive.

Today is a holiday in Japan – Autumn Equinox Day. The country's markets are closed.

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Gold (XAUUSD) continues its upward rally; price climbs above 2,650 USD

The XAUUSD price reached a new all-time high this morning at 2,670 USD. The trend for gold remains upward, though a downward correction may start soon – read about it in our XAUUSD analysis for today, 25 September 2024.

XAUUSD forecast: key trading points

• Market focus: gold is steadily rising following the US Fed rate cut

• Current trend: a strong uptrend is underway

• XAUUSD price forecast for 25 September 2024: 2,640 and 2,700

Fundamental analysis

XAUUSD quotes are steadily rising, reaching a new all-time high of 2,670 USD after the US Fed cut its interest rate by 0.50% last week. The onset of the rate-cut cycle is putting pressure on the US dollar.

Gold’s growth is also supported by weak economic data from the US – Yesterday’s Consumer Confidence index from the Conference Board was worse than expected: instead of the anticipated 103.9 points, the index came in at 98.7. As a result, the precious metal closed the day with solid gains against the US dollar.

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NZDUSD forecast: the New Zealand dollar continues to lose ground against the US dollar

Rising PCE and Michelle Bowman’s speech could support the US dollar - read more in our analysis for 27 September 2024.

NZDUSD forecast: key trading points

• US Core PCE (YoY): Previously 2.6%, Forecasted 2.7%

• Speech by Michelle Bowman, member of the US Federal Open Market Committee (FOMC)

• CFTC NZD Net Speculative Positions: Previously -1.9K

• NZDUSD forecast for 27 September 2024: 0.6222 and 0.6140

Fundamental analysis

The Core Personal Consumption Expenditures Price Index (Core PCE) is an economic indicator measuring changes in the cost of goods and services consumed by US households (excluding food and energy prices due to their high volatility). The index is one of the most important inflation indicators in the US, which the Federal Reserve System uses to assess economic conditions and make decisions on monetary policy.

The previous value was 2.6% on an annualised basis. The forecast for 27 September 2024 suggests it may increase by 0.1% to 2.7%. Such expectations boost optimism among market participants, although the data may differ significantly. If the published statistics exceed forecasts, it will provide additional support to the US dollar and cause a decline in the NZDUSD exchange rate.

Michelle Bowman, a member of the US Federal Open Market Committee (FOMC) and the Fed’s Board of Governors, is scheduled to deliver a speech. Her report may contain data on future US monetary policy.

The Commodity Futures Trading Commission’s (CFTC) weekly report analyses the volume of speculative positions held by non-commercial traders in US futures markets. It reflects the difference between traders’ long and short NZD positions on the Chicago and New York trading floors. The CFTC report is published every Friday and covers data from as of Tuesday of the current week.

The fundamental analysis for 27 September 2024 shows a notable decrease in positions in the last reporting period, indicating the likelihood of a trend reversal. However, the forecast remains uncertain until the actual data is published.

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USDJPY develops upward momentum: the dollar has become the market favourite

USDJPY remains on the upside. Powell and Ishiba supported the USD. Read more in our USDJPY analysis for 1 October 2024.

USDJPY forecast: key trading points

• The USDJPY pair has been ‘in the plus’ for the second consecutive day

• Powell’s comments have reinforced support for the US dollar

• USDJPY forecast for 1 October 2024: 144.47

Fundamental analysis

On 1 October 2024, the USDJPY rose to 144.29, marking the second session in a row with the yen declining against the dollar.

Federal Reserve Chairman Jerome Powell provided support to the US dollar with his comments, signaling that a rapid reduction of interest rates in the US is not expected. Powell indicated that the Fed might opt for a 25 basis point rate cut in its two remaining meetings this year. The Fed has shifted its outlook from a ‘hard’ rate stance to a softer, more adaptable approach, leading the market to reevaluate its position.

In Japan, political comments from Shigeru Ishiba, former defence minister, added pressure on the yen. Ishiba emphasised that Japan's fiscal policies should remain flexible, reflecting the nation's current economic conditions.

The USDJPY outlook continues to favour the US dollar, and further gains are anticipated.

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Silver (XAGUSD) corrects down from resistance at 32.30 USD

The XAGUSD price failed to overcome the resistance at 32.30 USD yesterday and entered a downward correction. Tomorrow, market participants will focus on US labour market data. Read about it in our XAGUSD analysis for today, 3 October 2024.

Silver forecast: key trading points

• Market focus: market participants are awaiting tomorrow’s US labour market statistics

• Current trend: a local correction is underway within the uptrend

• XAGUSD forecast for 3 October 2024: 32.30 and 31.00

Silver fundamental analysis

Silver (XAGUSD) remains in a strong daily uptrend, fuelled by the US Federal Reserve’s recent decision to cut interest rates by 0.50% during the September meeting. This cycle of rate cuts is weakening the US dollar, supporting both gold and silver prices.

Market participants are closely watching US employment data for insights. The ADP report on Wednesday showed an increase of 143,000 jobs. However, Friday’s upcoming Nonfarm Payrolls and Unemployment Rate figures will be crucial. A decline in employment could weigh on the USD and provide bullish momentum for silver. At the same time, stronger-than-expected job growth could support the USD, potentially triggering a deeper correction in XAGUSD.

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