Morning Market Review

EUR/USD

EUR is strengthening against USD during today's Asian trading session, developing an uptrend in the short term, the signals for which began to form on September 9. USD is again under pressure from a moderate growth in optimistic sentiment at the market. In particular, traders are responding positively to reports of notable progress in the development of a coronavirus vaccine. Last weekend, Pfizer announced its intention to complete the third phase of clinical trials by the end of October, which will allow the vaccine to begin distribution by the end of the year. Macroeconomic statistics from the eurozone released on Monday also provided moderate support to EUR. Industrial Production in the euro area in July rose by 4.1% MoM, which was 0.1% better than market expectations. In annual terms, the indicator fell by 7.7% YoY after decreasing by 12% YoY in the previous month. Market forecasts suggested a decline of 8.2% YoY.

GBP/USD

GBP is showing positive dynamics against USD, recovering since the end of the last trading week and retreating from its local lows since July 24. The growth of the instrument is largely due to technical factors, while fundamentally the situation is not changing significantly. American investors are looking forward to the Fed meeting on Wednesday, and British investors are taking a lead from the news around the situation with Brexit. Earlier British Prime Minister Boris Johnson announced a bill that will allow London to amend the trade agreement retroactively. Johnson considers it to be some kind of insurance in case of unacceptable conditions for the UK from the EU. The British Parliament approved this bill in the first reading, which contributed to increased tension, as the risks of a hard Brexit have grown significantly.

NZD/USD

NZD is gaining ground against USD during today's morning trading session, trying to consolidate above 0.6700. The published macroeconomic statistics from China provide significant support to the instrument, while the data from New Zealand turned out to be worse than market expectations. China reported a sharp 5.6% YoY rise in Industrial Production in August, after rising by 4.8% YoY in the previous month. Experts expected an increase of 5.1% YoY. Retail Sales also showed solid growth of 0.5% YoY in August after falling by 1.1% YoY in July. Analysts had expected zero dynamics. In turn, the published Westpac Survey of consumer sentiment in New Zealand indicated a decline in Q3 2020 from 97.2 to 95.1 points, while analysts expected a moderate increase in the indicator to 102.4 points.

USD/JPY

USD is falling against JPY during today's Asian session, located near the local lows since August 31, updated the day before. USD remains under pressure amid the upcoming meeting of the US Federal Reserve on Wednesday, as investors fear that the regulator may resort to new measures to support the economy. Additional pressure on the instrument is exerted by Monday's macroeconomic statistics from Japan. The data reflected a moderate 8.7% MoM growth in Industrial Production in July, after rising by 8% MoM in the previous month. In annual terms, the production decrease slowed down from –16.1% YoY to –15.5% YoY.

XAU/USD

Gold prices are rising during today's Asian trading session, building on the "bullish" momentum that formed earlier in the week. The instrument strengthened by more than 1%, responding positively to the further weakening of USD, which is awaiting the results of the Fed meeting on Wednesday. It is predicted that the regulator will not change the parameters of monetary policy; however, it might maintain its soft rhetoric regarding its future prospects. In addition, investors are looking forward to hearing plans for additional bailouts, given that US lawmakers have so far failed to agree on a new bailout package. The instrument is additionally supported by the expectations of the minutes of the Bank of Japan and the Bank of England meetings, which will take place on September 17.