Dollar's Dominance Continues, Sterling and Euro Accelerate Down
| Action Insight Mid-Day Report 2-5-24 |
Dollar's Dominance Continues, Sterling and Euro Accelerate Down |
Dollar's robust rally persists in early US session, and gains momentum alongside the strong rise 10-year yield, now surpassing the 4.1% mark. Fed Chair Jerome Powell's hawkish comments in CBS interview air during the weekend continued to shift market expectations. The probability of Fed holding interest rate unchanged in March has soared to approximately 85%, with the anticipation of a May rate cut dropping to just over 60%. It's important to note, though, that these expectations could shift in response to the forthcoming ISM Services data, which remains a crucial determinant of market sentiment. In terms of currency strength, Japanese Yen emerges as the runner-up, with New Zealand Dollar not far behind. This scenario, however, reflects more on the deeper depreciation of other currencies rather than intrinsic strength in Yen and Kiwi. On the other end of the spectrum, Euro and Sterling are the worst performers, finding themselves under considerable pressure against Dollar. Australian Dollar is also soft, and appears susceptible to dovish surprises from RBA in the upcoming Asian session. Meanwhile, Canadian Dollar and Swiss Franc show mixed performances, finding themselves in the market's middle ground... |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.0747; (P) 1.0822; (R1) 1.0864; More... EUR/USD's fall from 1.1138 continues today, and the break of trend line in 4H MACD indicates downside acceleration. Intraday bias remains on the downside. Sustained break of 1.0722 structural support will argue that whole rise from 1.0447 has completed. Deeper fall would then be seen to target this low. On the upside, break of 1.0896 resistance is needed to indicate short term bottoming. Otherwise, risk will stay on the downside in case of recovery. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 00:00 | AUD | TD Securities Inflation M/M Jan | 0.30% | 1.00% | | 00:30 | AUD | Goods Trade Balance (AUD) Jan | 10.96B | 10.50B | 11.44B | | 01:45 | CNY | Caixin Services PMI Jan | 52.7 | 52.7 | 52.9 | | 07:00 | EUR | Germany Trade Balance (EUR) Dec | 22.2B | 22.3B | 20.4B | | 08:45 | EUR | Italy Services PMI Jan | 51.2 | 50.8 | 49.8 | | 08:50 | EUR | France Services PMI Jan F | 45.4 | 45 | 45 | | 08:55 | EUR | Germany Services PMI Jan F | 47.7 | 47.6 | 47.6 | | 09:00 | EUR | Eurozone Services PMI Jan F | 48.4 | 48.4 | 48.4 | | 09:30 | EUR | Eurozone Sentix Investor Confidence Feb | -12.9 | -15 | -15.8 | | 09:30 | GBP | Services PMI Jan F | 54.3 | 53.8 | 53.8 | | 10:00 | EUR | Eurozone PPI M/M Dec | -0.80% | -0.80% | -0.30% | | 10:00 | EUR | Eurozone PPI Y/Y Dec | -10.60% | -10.50% | -8.80% | | 14:45 | USD | Services PMI Jan F | 52.9 | 52.9 | | 15:00 | USD | ISM Services PMI Jan | 52.1 | 50.6 |
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