In this article, we have covered the highlights of global market news about the USD/CAD, XAU/USD, EUR/USD and USD/THB.
USD/CAD: As BoC nears the terminal, the loonie is expected to decline.
The Canadian currency is expected to drop somewhat, according to experts at CIBC Capital Markets, as weaker global growth affects commodities and the Federal Reserve marginally outperforms the Bank of Canada (BoC).
“While we anticipate another unconventional boost at the September meeting, if the market interprets it as the end of the BoC’s tightening cycle, it won’t be constructive for the loonie.”
“With a widening travel services trade imbalance and a colder path for commodities, we forecast USDCAD is hitting 1.33 in early 2023. However, a general weakening of the USD that year as the Fed maintains its hold position predicts that the loonie won’t decline much lower during the following year. Overall, the currency CAD remains rangebound.
Gold price forecast: XAU/USD must break $1,763 to prolong the decline – Confluence Detector.
Below the $1,800 level, the price of gold is licking its wounds while looking for a new stimulus to start the next move down. At the start of the week, risk-on flows have resumed, supporting a broad decline in the US dollar while also lowering Treasury rates. Investors consider the effects of a supersized Fed rate in the coming months, the likelihood of which has increased to 70% after a significant upbeat surprise in the US Nonfarm Payrolls for July.
The US inflation data for July, scheduled on Wednesday, was jeopardized by the massive employment loss. The US Consumer Price Index (CPI) headline rise may moderate somewhat, but the underlying number is expected to increase. The question of when inflation peaked is still up for dispute as we approach the week’s significant event risk. After the Fed said it continues to be data-dependent when determining its policy stance, it is anticipated that the non-yielding bullion would remain highly reactive to US employment and inflation statistics.
According to the Technical Confluence Detector, the gold price has to break through several vital support levels around the $1,772-$1,771 region to restart the post-NFP sell-off.
The convergence of the SMA5 one-day, Fibonacci 23.6 percent one day, and the previous low four-hour defines this demand zone.
The next item in sellers’ minds will be the Fibonacci 61.8 percent one week at $1,769. To counteract the current bullish trend, bearish will need to accept a price below the $1,763 level, which coincides with the Fibonacci 61.8 percent one-month and pivot point S1 levels.
EUR/USD: The 0.9863 lows from early December 2002 are still in sight, according to CIBC
Since the eurozone is experiencing higher recession risks due to high nat gas prices and ongoing supply challenges, the EUR/USD might test the lows from December 2002, according to experts at CIBC Capital Markets.
“Exorbitant natural gas prices and continued supply issues put the eurozone at increased danger of recession.”
“An ECB that relies on data may consider tightening again at its next meeting. The early December 2002 EUR/USD lows of 0.9863 are still within reach, but there are worries about the recession and fragmentation risks due to growing credit issues.
USD/THB will incline upward near 38.00 by Q4: MUFG
The Thai baht fell from 35.341 to 36.364 in terms of London closing rates in July compared to the US dollar. The THB seems to be negatively impacted by global uncertainties despite possible internal fundamentals advantages, according to MUFG Bank experts.
“We increase our USD/THB forecast to 37.50 in the third quarter and 38.00 in the fourth. This results from market worries about global growth impacting the THB’s standing. In contrast to our prediction of 3.4 percent GDP growth in 2022, domestic growth may be subject to adverse risks. In 2022 and a portion of 2023, Thailand’s tourist industry may continue to be impacted by China’s difficult recovery and COVID-Zero agenda.
Despite our prediction of a 50 basis point rate increase by the BOT this year, it could be insignificant in light of other central banks’ actions.
As the headwinds weaken, “we estimate slight downsides in 2023, down to 37.25 in Q1-2023 and 36.250 in Q2-2023.”
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