Here is what you need to know on Tuesday, September 19:
Following Monday's indecisive action, markets remain choppy early Tuesday with investors refraining from taking large positions ahead of this week's all important central bank meetings. In the European session, Eurostat will release revisions to the August Harmonized Index of Consumer Prices. In the second half of the day, the US economic docket will feature Building Permits and Housing Starts. Finally, Statistics Canada will publish Consumer Price Index (CPI) for August.
The modest improvement seen in risk mood caused the US Dollar (USD) to lose some interest during the American trading hours on Monday. The USD Index, which tracks the currency's performance against a basket of six major currencies, lost 0.25% but managed to stabilize above 105.00. Meanwhile, the benchmark 10-year US Treasury bond yield fell 0.6% to 4.3% and put additional weight on the USD's shoulders. Early Tuesday, US stock index futures trade flat on the day.
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Canadian Dollar.
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
The Minutes of the Reserve Bank of Australia’s (RBA) September monetary policy meeting showed earlier in the day that policymakers agreed that the case to hold the policy rate steady was stronger as recent data did not materially alter the economic outlook. "Members recognize the value of allowing more time to see full effects from past tightening on the economy," the RBA noted in its publication and reiterated that the policy will be guided by incoming data and the assessment of risks. AUD/USD showed no reaction and was last seen moving sideways slightly below 0.6450.
USD/CAD dropped below 1.3500 on Monday as the rising crude oil prices allowed the commodity-sensitive loonie to outperform its rivals. The barrel of West Texas Intermediate gained more than 1% on Monday and reached a fresh 2023-high above $92. On a yearly basis, the CPI in Canada is forecast to rise 3.8%, up from the 3.3% increase recorded in July.
EUR/USD benefited from the USD weakness in the American session and closed the day in positive territory on Monday before going into a consolidation phase slightly below 1.0700 early Tuesday.
USD/JPY continues to fluctuate below 148.00 in the European session. Japanese Industry Minister Yasutoshi Nishimura said on Tuesday that at some point the Bank of Japan will not be able to use monetary policy to buy time. Separately, Japanese Prime Minister (PM) Fumio Kishida said that he plans to explain Japan's financial and economic policies in New York.
GBP/USD briefly climbed above 1.2400 on Monday but erased its recovery gains to end the day flat. The pair was last seen moving up and down in a tight channel at around 1.2380.
Gold took advantage of retreating US Treasury bond yields on Monday and climbed to a fresh two-week high above $1,930. XAU/USD edged lower in the Asian session on Tuesday but managed to hold above that level.
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