IC Markets Asia Fundamental Forecast | 17 September 2021

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What happened in the US session?

The US retail sales data set came in much stronger-than-expected, overcoming negative figures seen in expectations and data from the prior month. Safe-haven assets gold and CHF dropped further from the European session, following the news favouring the US dollar.

What does it mean for the Asia Session?

Amid the weakness seen on fellow safe-havens, gold and CHF, against the US dollar, relative strength in the Yen is likely to dissipate, evident from the failed attempt to make a sustained break below the lower boundary of a two-week range at 109.60.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

Traders would be looking for tapering signals at next week’s FOMC meeting. The latest August jobs report and inflation, in which both came in lower-than-expected, may push a tapering announcement to the November FOMC meeting.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

The latest strength seen in the US retail sales figures eased concerns over a sharp slowdown in economic growth and raises hope for an official plan to wind down asset purchases. The precious metal would remain pressured from an improved environment for tapering.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

A bearish spill over on the Aussie is likely from the weak labour data set and ongoing uncertainty in economic recovery due to the low vaccination rates and the persistent spread of the Delta variant. The RBA acknowledged the situation with an extension of its asset taper program to mid-February next year.

Next 24 Hours Bias

Weak bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Favourable data for the Kiwi, notably with the latest GDP data set rising above expectations, is likely to cushion the strength of the US dollar derived from tapering expectations at next week’s FOMC meeting. Moreover, RBNZ is very likely to raise rates at its upcoming meeting in October.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The Japanese government lowered its economic expectations for the first time in four months due to the global COVID-19 situation. Notably for the first time in 17 months, the authorities downgraded their view of production.

Next 24 Hours Bias

Weak Bearish