Markets quiet down early Tuesday following Monday’s volatile action. Business sentiment from Germany and US will be featured in economic calendar. More importantly, Fed Chair Jerome Powell will speak on economic outlook and monetary policy at National Associations for Business Economics (NABE) meeting in Philadelphia.
The US dollar staged a rebound on Monday as investors reassessed the US-China trade conflict after President Donald Trump announced at the end of last week plans to impose additional 100% tariffs on Chinese imports.
US Treasury Secretary Scott Bessent told Fox Business on Monday that he believes China is open to discussions and added that a 100% tariff doesn’t have to happen. Wall Street’s main indexes ended the day with significant gains and the USD Index rose 0.4% on the day, erasing a large portion of Friday’s losses.
Early Tuesday, China’s Commerce Ministry said that the US needs to correct its ‘wrong practices’ as soon as possible and noted that the US cannot have talks while threatening to intimidate and introduce new restrictions, which is not the right way to get along with China.
The DXY Dollar Index holds steady above 99.00 early Tuesday, while US stock index futures lose between 0.5% and 1%, reflecting a souring risk mood.
Minutes of the Reserve Bank of Australia’s (RBA) September monetary policy meeting showed that board members agreed the policy is still a little restrictive, but it’s also difficult to determine because of the considerable uncertainty about the global outlook, US tariffs and the Chinese economy.
AUDUSD remains under heavy bearish pressure early Tuesday and trades near 0.6470, its lowest level since late August.
The UK’s Office for National Statistics (ONS) reported on Tuesday that the ILO Unemployment Rate edged higher to 4.8% in the three months to August from 4.7%. Other details showed that the Employment Change was +91,000 in this period, compared to the 232,000 increase recorded previously.
GBPUSD stays on the back foot after posting small losses on Monday and trades below 1.3300.
Japanese Finance Minister Katsunobu Kato said on Tuesday that he has recently seen one-sided and rapid moves in the foreign exchange and reiterated that it’s important for currencies to move in a stable manner, reflecting fundamentals.
After rising in the Asian session on Tuesday, the USDJPY pair lost its traction and was last seen trading in negative territory below 152.00.
EURUSD fluctuates in a narrow channel below 1.1600 after closing in the red on Monday.
French Prime Minister Sebastien Lecornu is expected to present the budget proposal later in the day, which will reportedly target a total cut in costs of around €31 billion.
Gold’s relentless rally continued on Monday and the yellow metal gained more than 2% to register its highest daily close ever above $4,110.
After hitting a new record peak near $4,180 early Tuesday, XAUUSD corrected lower and was last seen trading at around $4,130.
(Source: OANDA)
