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Navigating Asian Markets: PMI Trends, Dollar Dynamics, etc. 

Navigating Asian Markets: PMI Trends, Dollar Dynamics, & Commodity Outlook. During the recent US session, the flash Composite PMI for August revealed a notable slowdown. It hit a six-month low of 50.4. This was primarily attributed to a reduced rise in output by companies. It was also coupled with a decline in total new orders, marking the first such decline in six months. This weaker business activity has cast uncertainty over the robustness of US economic growth, resulting in a drop in the dollar index (DXY) from 104.00 to 103.30.

Additionally, EIA crude oil inventories saw an unexpectedly substantial drawdown of 6.1 million barrels, indicating heightened demand in the US. This led to a temporary uptick in crude oil prices, with WTI bouncing from $77.50 to $79.30 per barrel. However, the rally was short-lived as concerns regarding weakening macro fundamentals, particularly the deteriorating PMI activity in Europe, took precedence, causing prices to revert below the $79.00 threshold.

Navigating Asian Markets: PMI Trends, Dollar Dynamics

In the upcoming Asia session, the DXY found support around 103.30 and is anticipated to gain strength as traders evaluate the latest flash Composite PMI reports from both the Eurozone and the US. Given Europe’s notably weaker PMI readings compared to the US, demand for the US dollar could remain robust throughout the day.

DXY Forecast

Following a slightly lower-than-forecast unemployment claims figure last week, which bolstered the DXY, another potentially subdued reading could reignite demand for the greenback.

Federal Reserve Bank of Philadelphia President Patrick Harker will discuss the US economic outlook in a CNBC interview. His insights, along with those of fellow committee members, regarding inflation, economic growth, and monetary policy will significantly influence the demand for the US dollar and thereby steer the direction of the DXY.

Central Bank Notes

  • The federal funds rate target ranges from 5.25% to 5.50%.
  • The Committee’s commitment to achieving a 2.0% inflation target.
  • Will adjust monetary policy if risks arise that could impede goal achievement.
  • Factors considered: labor market conditions, inflation pressures, expectations, and global financial developments.

Next meeting: September 19-20, 2023.

Similar analyses and forecasts can be seen for Gold (XAU), and the Australian Dollar (AUD). This also includes the Kiwi Dollar (NZD), the Japanese Yen (JPY), the Euro (EUR), the Swiss Franc (CHF), the Pound (GBP), the Canadian Dollar (CAD), and Oil.

  • Next 24 Hours Bias for Gold (XAU): Weak Bullish
  • Next 24 Hours Bias for Australian Dollar (AUD): Weak Bearish
  • Next 24 Hours Bias for Kiwi Dollar (NZD): Medium Bearish
  • Next 24 Hours Bias for Japanese Yen (JPY): Medium Bullish
  • Next 24 Hours Bias for Euro (EUR): Weak Bearish
  • Next 24 Hours Bias for Swiss Franc (CHF): Weak Bearish
  • Next 24 Hours Bias for Pound (GBP): Medium Bearish
  • Next 24 Hours Bias for Canadian Dollar (CAD): Weak Bullish
  • Next 24 Hours Bias for Oil: Medium Bearish

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