News

China’s exports of rare earth magnets to the U.S. fell in September, ending months of recovery amid continues trade disputes between the two countries.

The US Dollar (USD) is modestly stronger against most major currencies but remains comfortably within the range established since June, as narrowing U.S.–G6 rate differentials curb the potential for further rallies.

The Japanese Yen (JPY) remains under pressure this week as investors unwind safe-haven positions amid easing U.S. market concerns.

Silver prices (XAG/USD) fell on Tuesday, according to FXStreet data.

Silver prices (XAG/USD) fell on Tuesday, according to FXStreet data.

Fundamental
Overview

The USD strengthened a bit
on Friday following some positive Trump’s comments on China as Treasury yields
bounced and erased the Thursday’s losses. Overall, the US dollar performance
has been mixed as markets have been driven by quick changes in risk sentiment since
Trump’s tariffs threat.

On the domestic side, the
US government shutdown continues to delay many key US economic reports. The
dollar “repricing trade” needs strong US data to keep going, especially on the
labour market side, so any hiccup on that front is weighing on the greenback.

The BLS will release the US
CPI report on Friday despite the shutdown, so that’s going to be a key risk
event. That will need to be seen in the context of US-China relations and any
negative shock by that time though. If things go south, then the CPI will not
matter much as growth fears will trump everything else.

On the NZD side, the RBNZ cut
by 50 bps at the last meeting bringing the OCR to 2.5%, which is the lower
bound of their estimated neutral range (2.5%-3.5%). They kept an easing bias
though as they are trying to “feel their way” as RBNZ’s Conway recently said.

On Sunday, we got the New
Zealand Q3 inflation report with the data coming out basically in line with
expectations. That didn’t change anything in terms of market pricing which
continues to see a 99% probability of a cut in November.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the NZDUSD broke above the downward trendline but couldn’t break above
the 0.5760 resistance zone. We are now consolidating just beneath that
resistance awaiting new catalysts for the next direction.

NZDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the rangebound price action between the 0.5760 resistance and
the 0.5710 support. The market participants will likely continue to play the
range by buying at support and selling at resistance until we get a breakout on
either side.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much we can add here as the buyers will likely step in around the support
with a defined risk below it to position for a rally back into the resistance,
while the sellers will look for a break lower to increase the bearish bets into
new lows. The red lines define the average daily range for today.

Upcoming Catalysts

The focus remains
on the US-China developments but on Friday we will also get the US CPI report and the US flash PMIs.

This article was written by Giuseppe Dellamotta at investinglive.com.

Hungary’s National Bank (MNB) will almost certainly leave its base rate unchanged at 6.50% today, leaving the overnight rate corridor unchanged as well. This decision aligns with the widely anticipated policy guidance for a prolonged hold.

FX volatility has moderated at the start of this week, with US equities extending the rebound on eased credit market concerns, ING’s FX analyst Francesco Pesole notes.

EUR/GBP remains steady below 0.8700 on Tuesday as investors turn cautious ahead of the UK inflation report due on Wednesday.

On Sunday evening, one of the many conflicts currently involving the US President escalated with Colombia. A few weeks ago, the Colombian president’s US visa was revoked.