Global Market Snapshot 10th September 2024

The US Dollar Index continues to strengthen, recovering part of last week’s losses. After last Friday’s mixed U.S. employment report raised uncertainty about the extent of the Federal Reserve’s rate cut next week, investors have shifted their focus to U.S. inflation data. The US Dollar Index rose 0.44% during the session to 101.633.

The market’s attention is turning to Wednesday’s U.S. inflation report, which is the next key indicator that could alter market expectations for the Fed’s September meeting. Although job additions in August were below expectations, the unemployment rate slightly declined, and wage growth remained steady, suggesting that the U.S. labor market is cooling, but not at a pace that would cause concern about the outlook for economic growth.

USDJPY rebounds from lows but remains vulnerable. After hitting a low of 141.75 on Friday, the USD/JPY pair rebounded, with a key support level at 141.68, marking the lowest point since August 5. As of Monday, USD/JPY has bounced back by 0.94% during the session, reaching 143.636. The daily Relative Strength Index (RSI) has risen from oversold levels. USD/JPY is expected to end its four-day decline that began at 147.20, with the next resistance level being the 10-day moving average at 144.43. If the trend weakens, USD/JPY could resume its downward movement and break below the support level of 141.68.

EURUSD fell below 1.1050 as market expectations shifted toward a smaller rate cut by the Federal Reserve this month, strengthening the U.S. dollar. Investors are awaiting Wednesday’s U.S. CPI data for new guidance on interest rates, while the European Central Bank is expected to cut rates this week.According to the CME FedWatch tool, there is a 27% chance that the Federal Reserve will cut rates by 50 basis points to 4.75%-5.00% in September, while the remaining participants lean toward a 25-basis-point rate cut. Looking ahead, with the U.S. August Consumer Price Index (CPI) data set to be released on Wednesday, more volatility is expected for the dollar this week.

GBPUSD stabilizes above 1.3 as key economic data looms. The UK experienced a brief period of economic stability after its first rate cut, with GBP/USD holding steady above 1.3. Recent economic data from the UK and the U.S. suggests that the Bank of England (BOE) may hold interest rates steady this month, while the Federal Reserve is expected to implement a rate cut. This has kept the pound relatively stable against the dollar. However, markets will closely monitor the magnitude of the Fed’s rate cut and the development of UK economic indicators this week for any potential shifts in market sentiment.

Ahead of this Wednesday decision, U.S. CPI data could influence market trends and, in turn, impact GBP/USD. On the other hand, the UK labour market remains weak, with unemployment benefit claims surging to 135,000 in July and economic growth slowing from 0.4% to 0%. This adds further uncertainty to BOE’s policy expectations. GBP/USD is expected to find support near the trendline connecting the 2014 and 2021 highs, around the 1.3030 and 1.2970 levels, before potentially continuing its upward trend.

BTC saw a recovery to approximately $56,595 after a sharp drop that mirrored the decline in risk assets.