Asian Markets Watch: Dollar Rally & Central Bank Signals

Market outlook: The dollar is bullish, and gold is weak; Asian markets brace for volatility amid key economic indicators and Fed speeches.

What Happened in the US Session?

The US session witnessed a surge in the dollar’s strength, overshadowing Canada’s robust economic expansion, as indicated by the Ivey PMI. Despite positive economic indicators, the Loonie struggled against the dollar bulls, with USD/CAD effortlessly surpassing the 1.3700 threshold. The currency pair continued its upward trajectory, aiming towards 1.3750, with significant resistance anticipated at 1.3780.

What Does it Mean for the Asia Session?

The dollar index (DXY) showcased significant bullish momentum, hitting a high of 105.45 during the US session and continuing its climb above 105.50 into the Asian market hours. This robust performance suggests prevailing tailwinds for the dollar throughout the day.

Key News Events Today

The focus of attention remains on speeches by two Federal Reserve governors during the US session:

1. FOMC Member Philip Jefferson speaks at 3:00 pm GMT.
2. FOMC Member Lisa Cook speaks at 5:30 pm GMT.

What Can We Expect from DXY Today?

Federal Reserve governors Jefferson and Cook’s speeches have the potential to inject higher volatility into the dollar. Any remarks concerning future monetary policy actions will likely significantly influence DXY’s performance.

Central Bank Notes

The Federal Funds Rate target range remains unchanged at 5.25% to 5.50%. The Committee monitors economic indicators closely, focusing on achieving maximum employment and a 2% inflation rate.

Next Meeting: June 11-12, 2024.

Next 24 Hours Bias: Medium Bullish

Gold (XAU)

What Can We Expect from Gold Today?

FOMC members Jefferson and Cook’s speeches, like DXY, are expected to impact gold prices, potentially increasing market volatility.

Next 24 Hours Bias: Weak Bearish

Asian Markets Watch: Dollar Rally, Gold & Central Bank Signals

The Australian Dollar (AUD)

What Can We Expect from AUD Today?

Following RBA Governor Michele Bullock’s dovish press conference, the Aussie experienced significant downward pressure, breaking below 0.6600. This trend will persist as AUD/USD trades around 0.6570 in Asian markets.

Next 24 Hours Bias: Strong Bearish

The Kiwi Dollar (NZD)

What Can We Expect from NZD Today?

The Kiwi faced downward pressure, falling below the 0.6000 threshold overnight. NZD/USD continued its decline during the Asia session, trading around 0.5985.

Next 24 Hours Bias: Medium Bearish

The Japanese Yen (JPY)

What Can We Expect from JPY Today?

Average cash earnings, an indicator of wage growth, increased in January and February. However, March’s estimate indicates a slowdown. Any surprises in this data could influence USD/JPY.

Next 24 Hours Bias: Medium Bullish

The Euro (EUR)

What Can We Expect from EUR Today?

Despite a rebound in retail sales, the Euro faced selling pressure against the dollar overnight, falling below 1.0750. This downward trend may continue throughout the day.

Next 24 Hours Bias: Medium Bearish

The Swiss Franc (CHF)

What Can We Expect from CHF Today?

Despite a decreased unemployment rate, the Swiss Franc faced pressure from a strong dollar, with USD/CHF rising above 0.9080.

Next 24 Hours Bias: Medium Bullish

The Pound (GBP)

What Can We Expect from GBP Today?

Strong dollar demand led GBP/USD to tumble below 1.2500. Overhead pressures may persist as GBP/USD slid lower towards 1.2480.

Next 24 Hours Bias: Medium Bullish

The Canadian Dollar (CAD)

What Can We Expect from CAD Today?

Despite Canada’s strong economic expansion, the Loonie struggled against the dollar, with USD/CAD surpassing 1.3700. The currency pair aimed for 1.3750, facing significant resistance at 1.3780.

Next 24 Hours Bias: Strong Bullish

Oil

What Can We Expect from Oil Today?

API stockpiles grew, disappointing market expectations and causing oil prices to edge lower. Anticipated EIA inventories could confirm this trend, potentially adding further downward pressure on oil prices.

Next 24 Hours Bias: Medium Bearish

In conclusion, the Asian markets will likely witness continued volatility influenced by key economic indicators, speeches by Federal Reserve governors, and global market trends.

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