Fundamental analysis GBPUSD, EURUSD, NZDUSD, AUDUSD, XAUUSD, Brent, WTI for 29.09.2021
Market participants' interest in risk continues to weaken. High commodity prices, the prospect of a key rate hike, a possible government shutdown, and even default are forcing investors to switch to safe assets. Supply shortages and supply disruptions in the hydrocarbon market have caused prices of gas and major petroleum products to rise. For the same reason, price pressures are getting stronger. High inflation calls for less stimulus, which is good for the monetary policy but is traditionally bad for stocks and commodity currencies.
EUR/USD made a new yearly low after the release of very strong data of the index of unfinished sales in the U.S. real estate market. The index growth by 8.1% against the forecast of 1.4% indicates a high activity in the housing market. At the same time, the ECB head said that the regulator won't revise the monetary policy parameters in order to respond to the new challenges for the eurozone economy. The reluctance of the ECB to distance itself from its traditional monetary policy so far has only hurt the European currency.
The British pound is getting cheaper amid the strong dollar. GBP/USD has consolidated below the support of 1.3500, which is the lowest price in 2021. Similar to the situation in the U.S., Britain is also actively getting rid of debt and the regulator intends to follow the path of forced tightening of monetary policy. At the same time, macro statistics do not fit Bank of England plans, and to reduce economic risks the regulator will have to make unscheduled adjustments. In addition, it is worth noting the growing energy crisis in the UK. At the moment the country has to turn off the electricity and stop production, which is not typical for the strong British economy.
Currencies with high beta coefficients such as AUD/USD and NZD/USD might suffer the biggest losses against the background of the declining risk appetite. In addition, China, which is the main trading partner for the Pacific Rim, is also forced to reduce production capacity amid the energy crisis. USD/CAD is rising, trying to overcome the resistance of 1.2750. The Canadian dollar was not significantly affected by the decline in domestic commodity prices, as the CAD continues to receive support from the rising hydrocarbons market. At the same time, positive statistics from the U.S. contributed to the strengthening of the pair.
Brent and WTI oil grades continue to strengthen, despite the slowdown in the reduction of major oil products inventories in the U.S. In addition to oil, a sharp rise in gas prices was also observed.
The XAU/USD dropped substantially after the U.S. macro releases and the support level of 1728 held the price from falling further. The upside potential of the metals market is limited by the growth of the commodities market.