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EUR/USD and GBP/USD Rally on Positive Market Sentiment

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Miguel A. Rodriguez
Miguel A. Rodriguez
05 novembre 2022
US fiscal stimulus updates, market sentiment, Brexit updates, and more.

The Japanese Producers Price Index (PPI) year on year of -0.8% came in lower than expected of -0.5% and even lower than the prior read of -0.6%. The PPI measures inflation in terms of costs for producers’ products, therefore it gives a hint about the consumer price index or inflation figures progress in the country. 

Equities 
Asian stock market edged higher on Monday as the Chinese president Xi could unveil in his visit this week to Shenzhen plans to further open of the economy to foreign investment, while the US stock market closed last week in the green as traders were optimistic about a possible fiscal stimulus deal could be achieved this week. 

The US administration suggested a makeshift solution of using some leftover funds from the unused Paycheck protection program. Talks between the two main parties in the US have failed so far to secure a fiscal stimulus deal to help the US economy to recover from the shutdowns caused by the surge in coronavirus infections. Meanwhile, Federal reserve’s members pointed out the need for federal aid as the economic recovery is losing momentum. 

  Stock Market

Change %

S&P 500

+0.5%

Dow Jones

+0.1%

NASDQ

+1.2%

Japan 225

-0.5%

DAX 30

-0.3%

FTSE 100

-0.1%

CAC 40

-0.01%

 

Currencies

Investors' optimism of a possible stimulus agreement led the US Dollar index to invalidate the inverted head and shoulders signal and to trade on Friday below the neckline hinting towards 91.78. A daily close below that level could send the price even lower towards 90.36.

The EUR/USD closed on Friday above the 50-day moving average, signaling that the price may continue to rally towards 1.1909.

The British pound benefited from a weaker US dollar on Friday and the GBP/USD hit a near five-week high at 1.3049. Investors ignored the UK government threats of leaving the trade deal talks this week if there are no deal signs on the horizon. The UK PM insisted that a deal would be beneficial for both sides however, the UK is also prepared to end the transition period on Australia style terms. A lack of trust between both started after the UK parliament approved the internal market bill that allows the UK government to break some of its commitments in the Brexit treaty.  

Commodities

The oil price opened this week’s session with a downward gap on news of ending the Norway strike and restoring the US production after Hurricane Delta. The Brent oil hit a three-week high on Friday $43.54 then retreated and closed in the red. A daily close below $42.50 may send the price even lower towards $39.60. While the US Crude could be on the way for a test of $38.37.

The Gold benefited also from a weaker US dollar and traded above $1,921 for the first time in over two weeks. The price could rally toward $2,015 while above $1,921.

Looking Ahead

Nothing much on the economic calendar today, the market will tune in the ECB Lagarde’s speech at 1:00 PM (GMT) and her Deputy Mr. Guindos at 4:00 PM. 

Le informazioni contenute nel presente documento sono redatte da CAPEX.com/it e non costituiscono né devono essere interpretate come suggerimenti di investimento. Le informazioni di cui al presente documento costituiscono comunicazioni di marketing generali a scopo informativo e, in quanto tali, non sono state preparate nel rispetto dei requisiti di legge che promuovono le ricerche di investimento indipendenti. Inoltre, non sono soggette ad alcuna limitazione sulle transazioni condotte in anticipo rispetto alla divulgazione delle ricerche di investimento in questione.Gli utenti / lettori non dovrebbero fare affidamento esclusivamente sulle informazioni qui presentate e dovrebbero fare le proprie ricerche / analisi anche leggendo la ricerca reale sottostante.  Il contenuto è generico e non tiene conto di circostanze personali individuali, esperienza di investimento o situazione finanziaria attuale.Pertanto, Key Way Investments Ltd non accetta alcuna responsabilità per eventuali perdite di trader a causa dell'uso e del contenuto delle informazioni presentate nel presente documento. Le prestazioni passate e le previsioni non sono un indicatore affidabile dei risultati futuri.

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel ha lavorato per importanti istituzioni finanziarie, come Banco Santander e Banco Central-Hispano. È autore di libri sul trading di valuta con diverse pubblicazioni alle spalle.

I CFD sono strumenti complessi e presentano un rischio elevato di perdere denaro rapidamente a causa della leva finanziaria. Il 69.69% dei conti degli investitori retail perde denaro quando fa trading su CFD con questo fornitore. Considera se comprendi il funzionamento dei CFD e se puoi permetterti di correre il rischio elevato di perdere i tuoi soldi.