Tariff worries clash with optimism over a Russia-Ukraine deal, testing risk appetite ahead of the FOMC Minutes. The NY Empire State Manufacturing Index and mixed Fed signals add to the uncertainty after the US traders returned from a long weekend.
The US Dollar Index (DXY) pauses after snapping a three-day losing streak, allowing EURUSD to halt a two-day decline and GBPUSD to recover the previous day’s retreat. Further, USDJPY drops back towards a week’s low, and Gold faces a bearish chart pattern after two days of gains.
NZDUSD rises despite the RBNZ’s 0.50% rate cut, while AUDUSD follows suit. USDCAD sees its first daily loss in three, with crude oil uptrend supporting the Canadian Dollar. Cryptocurrencies are flat within a short-term range, while equities edge higher.
EURUSD recovers after two days of losses, supported by improved German ZEW Sentiment, a shift in ECB rate signals, and optimism about the Russia-Ukraine peace plan. However, doubts about Putin’s willingness to negotiate keep the rebound in check.
GBPUSD dropped for the first time in four days due to mixed UK employment data and cautious comments from BoE Governor Andrew Bailey. However, better-than-expected inflation and a softer US Dollar pushed it to a two-month high before the latest pullback.
Further, USDJPY retreats after rising from a week’s low, as hawkish BoJ signals and strong Japanese economic data support the Yen.
Despite the RBNZ’s third consecutive rate cut, NZDUSD rebounds, reversing previous losses. The Kiwi pair ignores dovish comments from RBNZ Governor Orr about a potential 50bps cut and remains supported by cautious optimism, despite concerns over China, trade issues, and mixed geopolitical tensions.
AUDUSD stays firmer at a two-month high, brushing off weaker Q4 wage growth and a negative outlook for Queensland’s credit rating, supported by strong sentiment data and a softer USD.
USDCAD drops for the first time in three days, with Canada’s strong inflation data and a three-day rise in crude oil prices backing the Canadian Dollar.
Gold struggles for momentum within a week-long symmetrical triangle, forming a lower-high bearish pattern, as buyers await more signals to push for new record highs. However, optimism around Trump’s push for a Russia-Ukraine peace deal, a softer US Dollar, and strong Asian demand keep Gold buyers hopeful.
Crude oil continues its three-day uptrend, supported by discussions of delayed OPEC+ supply increases and Iran's opposition to Trump’s threats, ahead of the US weekly crude inventory data.
Cryptocurrencies stay under pressure due to FTX repayments, falling CME premiums, and fading optimism around Trump’s industry push. That said, Bitcoin (BTCUSD) stays lower after three straight days of declines, while Ethereum (ETHUSD) remains in a short-term trading range despite recent gains.
With mixed US data raising doubts about the Fed's next move, today’s FOMC Minutes become key. If the Fed sticks to a hawkish stance, it could boost the US Dollar and challenge Gold, EURUSD, and GBPUSD. NZDUSD and other Antipodeans might pull back. However, Crude Oil and USDJPY may resist a US Dollar rebound due to the hawkish BoJ and geopolitical tensions, and OPEC+ updates flagging oil supply crunch.
In addition to the FOMC Minutes, updates on Trump’s tariffs, the Russia-Ukraine peace plan, and Middle East tensions could impact market sentiment and favor safe-haven assets like Gold and the JPY.
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