General analysis GBPUSD, EURUSD, NZDUSD, AUDUSD, USDCAD, XAUUSD, Brent, WTI for 19.10.2021
The US dollar continues to show weakness. Expected QE cuts in November and monetary tightening in 2022 are no longer providing meaningful support for USD. On Monday the pressure on the US currency was put by a weak industrial production report. Industrial production fell by 1.3% in September, which caused a slowdown in annual terms. Capacity utilization also declined. The main reason for the fall in activity in the industrial sector is a drop in auto production amid a global shortage of semiconductors.
Today EUR/USD is moderately strengthening due to the dollar's weakness. At the same time, the single European currency is not too attractive for investing. The long-term problem for the EU is still high price pressure, and the consumer prices have already exceeded the target levels of the ECB. Also, a strong driver of inflation is the high price of energy amid slowing economic activity in the region.
The British pound and EUR are in similar situations. GBP/USD reacted positively to the Head of the Bank of England's statement that high inflation in the UK makes the regulator to act faster and more decisively. At the same time, market participants are considering the pound for short-term trading only.
Currencies with high beta coefficient AUD/USD and NZD/USD are trading near local highs. Both trading instruments received support after a weak release on the U.S. construction sector. USD/CAD is showing mixed dynamics early this week. Moderate pressure on the Canadian currency was provided by the release of weak data on the Canadian housing market.
After a brief correction on the oil market, Brent and WTI gained ground on Tuesday amid a shortage of coal and electricity in China. China is already in a cold spell and the government will be forced to increase its purchases of oil products.
Gold is still unable to recover its previous gains amid high demand for risky assets. XAU/USD is holding above the psychological level of 1750, but it can't overcome the resistance of 1800 during the month.