IC Markets Asia Fundamental Forecast | 21 November 2023
What happened in the US session?
There were no notable economic events overnight as the dollar index (DXY) continued its downward slide, falling as low as 103.40 by the end of the US session. Demand for the dollar looks to have completely dissipated and the DXY could drift towards the 103-threshold during the Asia session.
What does it mean for the Asia Session?
The Reserve Bank of Australia (RBA) will be releasing their minutes for the monetary policy meeting that took place on the 8th of November, where the board hiked the cash rate by 25 basis points to bring it up to 4.35%. The minutes will provide further insight into the decision-making process and actions for November’s meeting, as well as the outlook for the final meeting on the 5th of December. If the minutes communicate a neutral or even a dovish outlook, the Aussie is likely to fall during this news release.
The Dollar Index (DXY)
Key news events today
FOMC Meeting Minutes (7:00 pm GMT)
What can we expect from DXY today?
The Federal Reserve will release its minutes for the FOMC meeting that took place on the 1st of November where Fed Chair Jerome Powell and his fellow policymakers kept the Fed Funds rate on hold at 5.25% to 5.50% for the second consecutive meeting. Markets will receive a detailed understanding of the deliberations undertaken by the committee for November’s meeting as well as provide the outlook for the final meeting that will take place on the 13th of December. Any hawkish tone within the minutes is likely to spur demand for the greenback.
Central Bank Notes:
Next 24 Hours Bias
Strong Bearish
Gold (XAU)
Key news events today
FOMC Meeting Minutes (7:00 pm GMT)
What can we expect from Gold today?
The Federal Reserve will release its minutes for the FOMC meeting that took place on the 1st of November where Fed Chair Jerome Powell and his fellow policymakers kept the Fed Funds rate on hold at 5.25% to 5.50% for the second consecutive meeting. Markets will receive a detailed understanding of the deliberations undertaken by the committee for November’s meeting as well as provide the outlook for the final meeting that will take place on the 13th of December. Any hawkish tone within the minutes is likely to spur demand for the greenback and thus drive gold prices lower.
Next 24 Hours Bias
Medium Bullish
The Australian Dollar (AUD)
Key news events today
Monetary Policy Meeting Minutes (12:30 am GMT)
What can we expect from AUD today?
The Reserve Bank of Australia (RBA) will be releasing their minutes for the monetary policy meeting that took place on 8th of November, where the board hiked the cash rate by 25 basis points to bring it up to 4.35%. The minutes will provide further insight into the decision-making process and actions for November’s meeting, as well as the outlook for the final meeting on 5th December. If the minutes communicate a neutral or even a dovish outlook, the Aussie is likely to fall during this news release.
Central Bank Notes:
Next 24 Hours Bias
Strong Bullish
The Kiwi Dollar (NZD)
Key news events today
No major news events.
What can we expect from NZD today?
The Kiwi was one of the stronger performing currencies this morning as it raced past 0.6050 as Asian markets came online – it is likely to remain elevated today.
Central Bank Notes:
Next 24 Hours Bias
Strong Bullish
The Japanese Yen (JPY)
Key news events today
No major news events.
What can we expect from JPY today?
The Japanese yen saw strong inflows causing USD/JPY to dive and fall as low as 148.20 overnight. Downward pressures are likely to remain for this currency pair and a break under the 148-threshold could occur today.
Central Bank Notes:
Next 24 Hours Bias
Strong Bearish
The Euro (EUR)
Key news events today
ECB President Lagarde Speaks (4:00 pm GMT)
What can we expect from EUR today?
ECB President Christine Lagarde is due to speak at an event hosted by the German Ministry of Finance in Berlin. Any hawkish remarks with regards to the ECB’s monetary policy outlook is likely to cause the Euro to extend its current rally.
Central Bank Notes:
Next 24 Hours Bias
Medium Bullish
The Swiss Franc (CHF)
Key news events today
Trade Balance (7:00 am GMT)
What can we expect from CHF today?
Switzerland’s trade surplus widened to CHF5.0B in September as exports surged 8.9% MoM to CHF23.9B, due to higher sales of chemicals and pharmaceuticals; machinery and electronics; and watches while imports rose to CHF18.9B. Another month of widening surplus could spur demand for the Swiss franc and cause USD/CHF to extend its downward slide.
Central Bank Notes:
Next 24 Hours Bias
Medium Bearish
The Pound (GBP)
Key news events today
No major news events.
What can we expect from GBP today?
Bank of England (BoE) Governor Andrew Bailey noted that there is still plenty of ground to cover before inflation falls to the BoE’s 2.0% target despite UK inflation easing to 4.6% YoY in October at yesterday’s Henry Plumb Memorial Lecture. Governor Bailey also warned that “it’s certainly too soon to declare victory over inflation” – the Pound hit a high of 1.2520 overnight and is likely to extend its gains today.
Central Bank Notes:
Next 24 Hours Bias
Weak Bullish
The Canadian Dollar (CAD)
Key news events today
CPI (1:30 pm GMT)
What can we expect from CAD today?
Inflation in Canada moderated to 3.8% YoY for the month of September from 4.0% in the previous month. Although still historically high, inflationary pressures have dissipated quite strongly over the past twelve months and with October’s estimate of 3.6% YoY pointing to further easing, the Canadian dollar could weaken further causing USD/CAD to potentially rise during the US session.
Central Bank Notes:
Next 24 Hours Bias
Weak Bearish
Oil
Key news events today
API Weekly Crude Oil Stock (9:30 pm GMT)
What can we expect from Oil today?
Crude oil prices rose overnight with WTI oil climbing as high as $78.40 per barrel. Prices then proceeded to ease this morning as demand concerns arising from a slowing global economy outweighed the prospects of additional supply cuts by Saudi Arabia and the OPEC members.
API stockpiles have increased over the past three weeks which typically signals weaker demand in the US. Crude prices could face additional downwards pressures should inventory levels experience another week of stronger-than-expected increase for this data point.
Next 24 Hours Bias
Weak Bullish