Sep 14, 2020, 8:55:28 AM

Morning Market Review

EUR/USD

EUR shows insignificant growth against USD during today's Asian session, continuing the development of the moderate "bullish" impulse formed at the end of previous week. EUR is testing 1.1850, waiting for new drivers to appear on the market. Today, European investors are awaiting the publication of July data on the dynamics of industrial production in the eurozone. Forecasts assume that on a monthly basis, Production will accelerate from +9.1% MoM to +10% MoM, while the annual rate is likely to indicate a deterioration in dynamics from –12.3% YoY to –18.3% YoY. In addition, the market continues to analyze the results of the last week's speech by the ECB President Christine Lagarde. The regulator did not change the parameters of monetary policy, and Lagarde took a wait and see attitude, not responding to a noticeable increase in the EUR/USD rate which started in March.

GBP/USD

GBP is marginally strengthening against USD in the trading of today's morning session, retreating from the local lows since July 24, updated at the end of last week. The growth of GBP is technical in nature, while the pair continues to remain under the pressure of sharply increased risks associated with the hard Brexit. Markets are still trying to figure out what Boris Johnson is trying to achieve, having stepped up criticism of the EU recently. Last week the British government passed a bill that could allow the UK to actually violate international law on the issue of trade with Northern Ireland. It is possible that these are only political machinations, which are designed to bargain with the EU for the best terms of the deal, but so far Johnson's position looks quite plausible.

AUD/USD

AUD is trading near zero against USD during today's Asian session, developing mostly flat dynamics at the end of the last trading week. Last Friday's macroeconomic statistics from the US was again ambiguous. In August, the Consumer Price Index in the USA slowed down from +0.6% MoM to +0.4% MoM, which was slightly better than market expectations at +0.3% MoM. In annual terms, inflation accelerated from +1% YoY to +1.3% YoY with the forecast of growth by 1.2% YoY. Excluding food and energy, prices increased by 0.4% MoM and 1.7% YoY, which was also slightly better than the forecasts of +0.2% MoM and +1.6% YoY. Interesting statistics from the US and Australia are not expected today, but on Tuesday Australia will publish the minutes of the last RBA meeting and will release a quarterly survey of consumer sentiment from Westpac.

USD/JPY

USD is trading in different directions against JPY in today's Asian session, developing a flat channel that formed at the beginning of the month. The ambiguous macroeconomic statistics from the US on the dynamics of consumer inflation, published at the end of last week, did not provide significant support to USD, while JPY was expecting the publication of new drivers. Today's macroeconomic statistics from Japan provide moderate support to JPY, as a result of which the pair is actively testing the level of 106.00 for a breakdown. Industrial production in July increased by 8.7% MoM, accelerating from the previous value of +8% MoM. In annual terms, the pace of production decreased by 15.5% YoY, also slightly better than forecasts at the level of –16.1% YoY. Capacity Utilization rose by 9.6% in July, after rising by 6.2% in June.

XAU/USD

Gold prices are slightly strengthening during today's morning trading, testing 1950.00 for a breakout. Quotes are recovering, offsetting the decline at the end of the last trading week, when the ECB representatives reaffirmed their commitment to a wait and see attitude. The President of the European regulator Christine Lagarde did not react to the high rate of EUR, and also disappointed those investors who were counting on additional measures to stimulate the economy. At the same time, the demand for gold remained high amid persisting epidemiological risks. In addition, traders are actively discussing the upcoming US presidential elections and the inability of US lawmakers to approve new measures to support the economy. Last week, the US Senate again blocked a proposal from the Republican Party to allocate USD 300 billion to combat the consequences of the epidemic.