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The Australian Dollar held steady following the release of Australia's August Trade Balance data. Australia’s trade surplus narrowed significantly to 1,825 million, falling short of expectations of 6,500 million. Exports declined 7.8% MoM, particularly in gold exports, which had previously been strong. Meanwhile, imports rose by 3.2%, signaling a higher demand for foreign goods. The Australian Bureau of Statistics also highlighted market vulnerabilities due to high asset prices and stress in sovereign debt markets. The Reserve Bank of Australia (RBA) recently kept its official cash rate at 3.6%, signaling caution on future rate hikes.
The US government shutdown, triggered by a failure to agree on a spending bill, has not had a significant negative impact on global markets. Wall Street registered gains for the fourth consecutive day, helping to boost market sentiment in Asia. Although the shutdown is expected to delay important US economic data, such as the Nonfarm Payrolls report, markets remain largely unfazed. The Fed’s expected rate cuts, driven by weak private-sector employment data, continue to exert downward pressure on the US Dollar. The Japanese Yen’s safe-haven status has weakened amid positive risk appetite across global markets.
The Euro (EUR) strengthened against the Canadian Dollar (CAD) as economic data pointed to further weakness in Canada’s manufacturing sector. The Canadian Manufacturing PMI fell to 47.7 in September, signaling a deepening contraction in factory activity. This follows seven consecutive months of decline, which has weighed heavily on the CAD. The European Central Bank’s (ECB) cautious stance on inflation, as mentioned by President Christine Lagarde, has helped support the Euro. Lagarde’s remarks indicate no immediate need for further rate cuts, which is seen as positive for the Euro against the CAD. Expectations of a potential Bank of Canada rate cut also add pressure on the Canadian Dollar.
Oil prices advanced on Thursday, with West Texas Intermediate (WTI) trading at $61.87 per barrel and Brent crude at $65.58. The increase in oil prices comes amid growing global demand and supply concerns, particularly as markets watch for further developments in global economic recovery. WTI is often seen as a key benchmark for global oil prices, with its low sulfur content making it an ideal commodity for refining. The rise in oil prices could be linked to increasing geopolitical tensions or positive economic data suggesting higher future demand. Investors are closely monitoring oil’s technical indicators for signs of further upward movement or potential pullbacks.
Gold prices have remained bullish over the past month, but recent technical indicators suggest caution. The Relative Strength Index (RSI) is signaling overbought conditions, indicating that a price pullback could be on the horizon. However, there has been little significant selling pressure, and an intraday rebound from lower levels around $3,800 confirms a near-term positive outlook for gold. Traders are advised to wait for consolidation or a mild correction before positioning for further gains. If gold drops below the $3,825 support zone, it could see deeper losses towards $3,700, but a break above $3,900 could push prices higher.
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