Forex – Page 10 – Sudhakar Forex Trader

Australian Dollar softens as RBA cut bets and trade tensions weigh, US NFP looms 6 February 2025, 22:47 •Aussie dips near 0.6280 amid trade gloom. •RBA likely to cut rates to 4.1%, capping Aussie gains. •Markets await US labor data for fresh momentum. •Soft Trade Balance data from Australia also affected the Aussie. The Australian Dollar (AUD) softens to around 0.6280 in Thursday’s American session, tallying nearly 0.30% losses. Expectations of a Reserve Bank of Australia (RBA) rate cut and revived United States (US)-China tariff anxieties hamper the pair’s upside. Meanwhile, attention shifts to the United States labor market report on Friday, with the Aussie bracing for further volatility. Daily digest market movers: Aussie edges lower as US Dollar recovers •On the local front, Australia’s trade surplus shrank to 5,085M in December from 6,792M, below expectations of 7,000M, as exports rose just 1.1% while imports surged 5.9%. •Markets now price a 95% chance of an RBA rate cut from 4.35% to 4.10%, undermining the Aussie’s resilience. •US President Donald Trump floats the idea of higher tariffs on the Eurozone and China, pressuring the China-linked Australian Dollar. •The US Dollar finds support from hawkish Federal Reserve expectations, although weaker labor data could curb USD demand. •Investors are now focusing on Friday’s Nonfarm Payrolls report, projected to show 170,000 new jobs in January, down from December’s 256,000. •Jobless Claims raised concerns as Initial claims rose to 219,000, surpassing expectations of 213,000 and up from last week’s 208,000, signaling potential labor market softening. •Continuing jobless claims increase to 1.886 million, above the forecast of 1.87 million. AUD/USD technical outlook: Mild retracement stalls near 20-day SMA The pair declined to 0.6280 on Thursday, after surging past the 20-day Simple Moving Average at approximately 0.6230. The Relative Strength Index (RSI) stands at 55, still in positive territory but declining. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram shows decreasing green bars, hinting at waning bullish momentum. Although the Aussie’s near-term support may hold above 0.6200, dovish RBA expectations and renewed tariff worries could keep any further advances below the 0.6300 resistance in check. A hold of the 20-day SMA would reject any bearish threats, at least for the short term. Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

The US Dollar regain some composure and partially reversed the weekly correction ahead of the release of the key US labour market report and amid persistent uncertainty surrounding Trump’s trade policies.

Here is what you need to know on Friday, February 7:

The US Dollar Index (DXY) managed to reclaim some ground lost helped by a mild bounce in US yields and a hiccup in the risk-linked universe. The January Nonfarm Payrolls will be the salient event at the end of the week, seconded by the preliminary Michigan Consumer Sentiment, and Wholesale Inventories.

EUR/USD saw its upside momentum somewhat curtailed, retreating to the mid-1.0300s on the back of the better tone in the US Dollar. Germany’s Balance of Trade results will be released along with the speech by the ECB’s De Guindos.

GBP/USD tumbled to three-day lows and revisited the 1.2360 region on the back of the BoE’s rate cut and USD buying. The BBA’s Mortgage Rate, the Halifax House Price Index and the speech by the BoE’s Pill are all due across the Channel.

USD/JPY kept its decline well in place, retesting two-month lows in the 151.80 region on the back of intense buying interest around the Japanese yen. Household Spending figures, and the advanced Coincident Index and Leading Economic Index will be published.

AUD/USD’s weekly recovery came short of the 0.6300 hurdle, sparking a corrective decline on Thursday on the back of the widespread gains in the US Dollar.

Further weakness saw prices of the American WTI approach the key contention zone around $70.00 per barrel, or fresh five-week lows.

Gold prices halted their five-day bullish move on Thursday, coming under fresh selling pressure a day after hitting an all-time peak past the $2,880 mark per ounce troy. Silver prices followed suit, dropping markedly to the sub-$32.00 mark per ounce.

By Ramya S|2025-02-10T06:36:37+05:30February 10, 2025 6:36 am|Forex|Comments Off on Australian Dollar softens as RBA cut bets and trade tensions weigh, US NFP looms 6 February 2025, 22:47 •Aussie dips near 0.6280 amid trade gloom. •RBA likely to cut rates to 4.1%, capping Aussie gains. •Markets await US labor data for fresh momentum. •Soft Trade Balance data from Australia also affected the Aussie. The Australian Dollar (AUD) softens to around 0.6280 in Thursday’s American session, tallying nearly 0.30% losses. Expectations of a Reserve Bank of Australia (RBA) rate cut and revived United States (US)-China tariff anxieties hamper the pair’s upside. Meanwhile, attention shifts to the United States labor market report on Friday, with the Aussie bracing for further volatility. Daily digest market movers: Aussie edges lower as US Dollar recovers •On the local front, Australia’s trade surplus shrank to 5,085M in December from 6,792M, below expectations of 7,000M, as exports rose just 1.1% while imports surged 5.9%. •Markets now price a 95% chance of an RBA rate cut from 4.35% to 4.10%, undermining the Aussie’s resilience. •US President Donald Trump floats the idea of higher tariffs on the Eurozone and China, pressuring the China-linked Australian Dollar. •The US Dollar finds support from hawkish Federal Reserve expectations, although weaker labor data could curb USD demand. •Investors are now focusing on Friday’s Nonfarm Payrolls report, projected to show 170,000 new jobs in January, down from December’s 256,000. •Jobless Claims raised concerns as Initial claims rose to 219,000, surpassing expectations of 213,000 and up from last week’s 208,000, signaling potential labor market softening. •Continuing jobless claims increase to 1.886 million, above the forecast of 1.87 million. AUD/USD technical outlook: Mild retracement stalls near 20-day SMA The pair declined to 0.6280 on Thursday, after surging past the 20-day Simple Moving Average at approximately 0.6230. The Relative Strength Index (RSI) stands at 55, still in positive territory but declining. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram shows decreasing green bars, hinting at waning bullish momentum. Although the Aussie’s near-term support may hold above 0.6200, dovish RBA expectations and renewed tariff worries could keep any further advances below the 0.6300 resistance in check. A hold of the 20-day SMA would reject any bearish threats, at least for the short term. Australian Dollar FAQs What key factors drive the Australian Dollar? One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive. How does the health of the Chinese Economy impact the Australian Dollar? China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs. How does the price of Iron Ore impact the Australian Dollar? Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD. How does the Trade Balance impact the Australian Dollar? The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

Aussie dips near 0.6280 amid trade gloom.
RBA likely to cut rates to 4.1%, capping Aussie gains.
Markets await US labor data for fresh momentum.
Soft Trade Balance data from Australia also affected the Aussie.

The Australian Dollar (AUD) softens to around 0.6280 in Thursday’s American session, tallying nearly 0.30% losses. Expectations of a Reserve Bank of Australia (RBA) rate cut and revived United States (US)-China tariff anxieties hamper the pair’s upside. Meanwhile, attention shifts to the United States labor market report on Friday, with the Aussie bracing for further volatility.

Daily digest market movers: Aussie edges lower as US Dollar recovers

On the local front, Australia’s trade surplus shrank to 5,085M in December from 6,792M, below expectations of 7,000M, as exports rose just 1.1% while imports surged 5.9%.
Markets now price a 95% chance of an RBA rate cut from 4.35% to 4.10%, undermining the Aussie’s resilience.
US President Donald Trump floats the idea of higher tariffs on the Eurozone and China, pressuring the China-linked Australian Dollar.
The US Dollar finds support from hawkish Federal Reserve expectations, although weaker labor data could curb USD demand.
Investors are now focusing on Friday’s Nonfarm Payrolls report, projected to show 170,000 new jobs in January, down from December’s 256,000.
Jobless Claims raised concerns as Initial claims rose to 219,000, surpassing expectations of 213,000 and up from last week’s 208,000, signaling potential labor market softening.
Continuing jobless claims increase to 1.886 million, above the forecast of 1.87 million.

AUD/USD technical outlook: Mild retracement stalls near 20-day SMA

The pair declined to 0.6280 on Thursday, after surging past the 20-day Simple Moving Average at approximately 0.6230. The Relative Strength Index (RSI) stands at 55, still in positive territory but declining. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram shows decreasing green bars, hinting at waning bullish momentum.

Although the Aussie’s near-term support may hold above 0.6200, dovish RBA expectations and renewed tariff worries could keep any further advances below the 0.6300 resistance in check. A hold of the 20-day SMA would reject any bearish threats, at least for the short term.

Australian Dollar FAQs

What key factors drive the Australian Dollar?

One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

How do the decisions of the Reserve Bank of Australia impact the Australian Dollar?

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

How does the health of the Chinese Economy impact the Australian Dollar?

China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

How does the price of Iron Ore impact the Australian Dollar?

Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

How does the Trade Balance impact the Australian Dollar?

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.

By Ramya S|2025-02-10T06:35:39+05:30February 10, 2025 6:35 am|Forex|Comments Off

NZD/USD dips on Thursday, settling at 0.5675 after testing key support.
Sellers attempted to push the pair below the 20-day SMA near 0.5640 but failed.

The NZD/USD pair softened on Thursday, edging 0.21% lower to 0.5675, but managed to hold above its 20-day Simple Moving Average (SMA). Bears attempted to break below the key support around 0.5640 but faced rejection, suggesting that buying interest remains resilient despite the slight pullback.

Technical indicators reflect a mixed outlook. The Relative Strength Index (RSI) declined sharply to 54, signaling a loss of momentum but still staying in positive territory. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram remains flat with green bars, indicating a temporary pause in bullish momentum rather than a confirmed shift toward sellers.

Looking ahead, as long as NZD/USD holds above the 20-day SMA, currently near 0.5640, the broader bullish bias remains intact. A sustained break above 0.5700 could trigger further upside toward 0.5735, while a close below the SMA could expose the pair to a deeper retracement toward 0.5600.

NZD/USD daily chart

By Ramya S|2025-02-10T06:30:35+05:30February 10, 2025 6:30 am|Forex|Comments Off

USD/CHF rebounds to 0.9048, gaining momentum after forming a “tweezers bottom” pattern at critical support levels.
Upcoming Nonfarm Payroll figures heighten market focus, following unexpected rise in unemployment claims.
Technical outlook suggests potential range trading, with a critical resistance at 0.9100 and support near 0.8998.

The USD/CHF reversed course and trimmed some of its weekly losses, posting gains of over 0.36%. At the time of writing, it was exchanged at 0.9048.

US jobs data showed that more people than expected applied for unemployment benefits, which could be linked to the Los Angeles wildfires and the weather. In the meantime, traders braced for the release of US Nonfarm Payroll figures on Friday.

USD/CHF Price Analysis: Technical outlook

The USD/CHF reversed its course, forming a “tweezers bottom” chart pattern. The pair found strong support at 0.8998 at the 50-day Simple Moving Average (SMA). If buyers achieve a daily close above 0.9000, look for some range-bound trading within the 0.9040 – 0.9100 area. A breach of the top of the range will expose the February 3 high at 0.9195.

Conversely, if the USD/CHF price closes below the 50-day SMA daily, further downside is seen, as the next support would be the November 22 daily high at 0.8957, followed by 0.8900.

USD/CHF Price Chart – Daily

By Ramya S|2025-02-10T06:29:34+05:30February 10, 2025 6:29 am|Forex|Comments Off

USD/CAD trades with mild gains near 1.4305 in Thursday’s late American session.
Canada’s Ivey PMI shows activity decreasing in January.
Investors will closely monitor the US and Canadian labour market reports, which are due later on Friday.

The USD/CAD pair posts modest gains around 1.4305 during the late American session on Thursday, bolstered by a mild bounce in US yields. The markets might turn cautious amid the ongoing uncertainty surrounding US President Donald Trump’s trade policies and ahead of the release of the US and Canadian January labour market reports.

Trump delayed his orders to impose 25% tariffs on Canada for 30 days. However, the threat of US trade tariffs remains in place and any signs of escalating renewed trade tensions between the US and Canada could exert some selling pressure on the Loonie.

Additionally, Thursday’s downbeat Canadian economic data weighed on the Canadian Dollar (CAD). Canada’s Ivey Purchasing Managers Index (PMI) data showed that Canadian economic activity contracted for the first time in five months in January as employment increased at a slower rate and prices rose.

Investors will keep an eye on the Canadian employment reports. Canada is projected to add far fewer jobs in January compared to December, down to 25K from 90.9K, and the Canadian Unemployment rate is estimated to tick up to 6.8% from 6.7%.

On the US front, economists expect the US economy to have added around 170,000 jobs in January, marking a significant slowdown from 256,000 gain in December. The unemployment rate is forecast to hold steady at 4.1%, suggesting continued resilience in the labour market despite recent economic headwinds.

Canadian Dollar FAQs

What key factors drive the Canadian Dollar?

The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.

How do the decisions of the Bank of Canada impact the Canadian Dollar?

The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.

How does the price of Oil impact the Canadian Dollar?

The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.

How does inflation data impact the value of the Canadian Dollar?

While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.

How does economic data influence the value of the Canadian Dollar?

Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.

By Ramya S|2025-02-10T06:26:55+05:30February 10, 2025 6:26 am|Forex|Comments Off

GBP/USD briefly tumbled back below 1.2400 after the BoE cut rates again.
Despite the rate cut, BoE tones struck a hawkish chord, crimping further bets.
US NFP Friday looms large ahead to cap off the trading week.

GBP/USD shuddered on Thursday, punching in a technical rejection from key averages and testing below the 1.2400 handle. The Bank of England (BoE) trimmed interest rates by another 25 bps, but struck a hawkish tone that saw rate markets tune down their bets of further rate cuts through the remainder of 2025.

According to rate markets, the BoE will likely make another two or three rate cuts through the year. All nine members of the Monetary Policy Committee (MPC) voted for a rate cut, with seven voting for a 25 bps rate trim and two particularly-dovish members voting for a double-cut for 50 bps. Despite the accelerated eagerness of policymakers to deliver a February rate cut, markets only expect another 70 or so basis points to be taken off the BoE’s reference rate this year.

Another Nonfarm Payrolls (NFP) jobs data dump looms on Friday. Net job additions are expected to ease to 170K in January, down from December’s print of 256K. Revisions to older data will be closely watched this week. Post-print revisions drifted toward the stronger side during 2024, frustrating market participants hoping for cracks in the US employment landscape to help push the Federal Reserve (Fed) toward more rate cuts.

GBP/USD price forecast

Thursday’s bearish pullback saw GBP/USD price in a technical rejection of the 50-day Exponential Moving Average (EMA), touching an intraday low near 1.2350. The pair settled the day a little south of 1.2450, but further bearish momentum could be on the cards as bulls struggle to sustain momentum.

GBP/USD daily chart

By Ramya S|2025-02-10T06:25:50+05:30February 10, 2025 6:25 am|Forex|Comments Off

EUR/USD remains stuck near the 1.0400 handle heading into Friday.
European Retail Sales failed to kickstart Fiber trading.
US NFP jobs data remains the key focus for the trading week.

EUR/USD churned some chart paper on Thursday, testing to the low side but wrapped up the day remaining stubbornly stuck near the 1.0400 handle. Euro bidders were entirely uninspired by Pan-EU Retail Sales figures that came in exactly as expected. Greenback traders treaded water ahead of Friday’s fresh print of US Nonfarm Payrolls (NFP) figures.

European Retail Sales growth came in at 1.9% YoY in December, matching median market forecasts and gaining slight ground over the revised previous figure of 1.6%. Despite the upswing in annualized figures, MoM Retail Sales actually contracted, printing at -0.2% compared to the previous month’s flat print of 0.0%, which was also revised slightly lower.

Economic data from the US was primarily mid-tier on Thursday, with weekly Initial Jobless Claims rising to 219K for the week ending January 31. Analysts had anticipated a figure of 213K, while the prior week’s number was slightly adjusted to 208K.

A new release of Nonfarm Payrolls (NFP) is set for Friday, with net job additions projected to decrease to 170K for January, compared to December’s figure of 256K. This week will see close scrutiny of revisions to older data. Historically, post-release revisions have tended to show stronger results in 2024, frustrating market participants who hoped to see weaknesses in the US job market that might encourage the Federal Reserve (Fed) to enact further rate cuts.

EUR/USD price forecast

EUR/USD saw some volatility on Thursday during the early hours, but ended the day down a scant 0.2% as price action remains stuck to the 1.0400 handle. Bids remain capped by the 50-day Exponential Moving Average (EMA) near 1.0440. Fiber managed to eke out a bullish recovery after the early week’s plunge toward the 1.0200 handle, but topside momentum remains limited.

EUR/USD daily chart

By Ramya S|2025-02-10T06:23:17+05:30February 10, 2025 6:23 am|Forex|Comments Off

NZD/USD trades in positive territory around 0.5680 in Friday’s Asian session.
The employment report keeps the RBNZ on track to cut by 50 bps in February.
Fed officials said uncertainty creates the environment for the Fed to slow the pace of cuts.

The NZD/USD pair trades firmer near 0.5680 during the Asian trading hours on Friday. However, the upside for the pair might be limited ahead of the highly anticipated US Nonfarm Payrolls (NFP) data for January, which is due later on Friday.

China filed a World Trade Organization challenge on Wednesday against US President Donald Trump’s new 10% tax on Chinese imports and withdrawal of a duty-free exemption for low-value packages, citing “protectionist” acts that violate WTO regulations. Investors will closely monitor the development surrounding renewed trade war tensions between the US and China, the world’s two largest economies. Any signs of escalation could weigh on the China-proxy Kiwi, as China is a major trading partner to New Zealand.

The New Zealand employment data for the fourth quarter (Q4) will keep the Reserve Bank of New Zealand (RBNZ) on track to cut the Official Cash Rate (OCR) this month. This, in turn, might further weigh on the New Zealand Dollar (NZD). The markets are now pricing in nearly 92% odds that the RBNZ will deliver a 50 basis points (bps) rate cut to 3.75% on February 19. It would be the third consecutive jumbo cut.

The hawkish stance from the Federal Reserve (Fed) officials might provide some support to the Greenback. Chicago Fed President Austan Goolsbee noted on Thursday that the uncertainty makes the environment for the Fed foggier, a reason to slow the pace of cuts. Meanwhile, Fed Vice Chairman Philip Jefferson said late Tuesday that they were facing uncertainty around Trump’s policies, adding that the robust economy would allow them to adopt a cautious approach to further policy-easing.

New Zealand Dollar FAQs

What key factors drive the New Zealand Dollar?

The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

How do decisions of the RBNZ impact the New Zealand Dollar?

The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

How does economic data influence the value of the New Zealand Dollar?

Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

How does broader risk sentiment impact the New Zealand Dollar?

The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

By Ramya S|2025-02-10T06:21:43+05:30February 10, 2025 6:21 am|Forex|Comments Off

The Australian Dollar could depreciate due to market caution ahead of US Nonfarm Payrolls release on Thursday.
The AUD receives downward pressure from increased risk aversion amid the US-China trade situation.
US Initial Jobless Claims rose to 219K the previous week, against the expected 213K and 208K prior.

The Australian Dollar (AUD) remains weak against the US Dollar (USD) for the second consecutive day on Friday. The AUD/USD pair faces additional downward pressure due to risk-off sentiment fueled by escalating US-China trade tensions.

China, Australia’s key trading partner, retaliated against the new 10% US tariff that took effect on Tuesday. However, on Monday afternoon, US President Donald Trump stated that he would likely speak with China within 24 hours. Trump also warned, “If we can’t reach a deal with China, the tariffs will be very, very substantial.” Despite this, no further updates have emerged.

Markets now price a 95% probability of a Reserve Bank of Australia (RBA) rate cut from 4.35% to 4.10% in February, further weakening the AUD’s resilience. The RBA has kept the Official Cash Rate (OCR) at 4.35% since November 2023, emphasizing that inflation must “sustainably” return to its 2%-3% target range before considering any policy easing.

Australian Dollar could decline amid market caution ahead of US jobs report

The US Dollar Index (DXY), which measures the US Dollar’s value against six major currencies, rises to near 107.70 at the time of writing. The Greenback could receive support as sentiment turns cautious ahead of a key US jobs report. Traders brace for Friday’s US Nonfarm Payrolls (NFP) data, which is expected to shape the Federal Reserve’s (Fed) monetary policy direction.
US Initial Jobless Claims rose to 219K for the week ending January 31, as reported by the US Department of Labor (DoL) on Thursday. This print surpasses initial estimates of 213K and was higher than the previous week’s revised tally of 208K (from 207K).
The US ISM Services PMI eased to 52.8 in January from 54.0 (revised from 54.1) in December. This reading came in below the market consensus of 54.3.
Federal Reserve Bank of Dallas President Lorie Logan made headlines late Thursday, stating that while inflation progress has been significant, the US labor market remains too strong for the Fed to consider rate cuts in the near future. Logan also acknowledged that even if inflation reaches the 2% target, it may not be sufficient on its own to prompt a rate reduction.
On Thursday, Federal Reserve Vice Chair Philip Jefferson expressed his satisfaction with keeping the Fed Funds rate at its current level, stating that he would assess the overall impact of Trump’s policies before making further decisions. He also emphasized that the Fed’s rate remains restrictive for the economy, even with a 100-basis-point decline.
President Trump has agreed to a 30-day suspension of the proposed 25% tariffs on Canadian and Mexican imports. This decision comes after Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum committed to enhancing border security measures to address concerns over illegal immigration and drug trafficking.
China’s Commerce Ministry announced that it will impose a 15% tariff on US coal and liquefied natural gas (LNG) imports, along with an additional 10% tariff on crude Oil, farm equipment, and certain automobiles. Additionally, to “safeguard national security interests,” China is implementing export controls on tungsten, tellurium, ruthenium, molybdenum, and related products.
Australia’s trade surplus fell to 5,085M in December, missing the expected 7,000M and down from the previous surplus of 6,792M. Exports increased by 1.1% MoM, slowing from November’s 4.2% rise, while imports surged 5.9% MoM, up from 1.4% in the prior month.
Australia’s Judo Bank Composite PMI climbed to 51.1 in January from 50.2 in December, reflecting modest growth in private sector activity. Meanwhile, the Judo Bank Services PMI rose to 51.2 from 50.8, marking the twelfth consecutive month of expansion in the services sector. Although growth was moderate, it was the strongest since August.

Australian Dollar remains steady below 0.6300, initial support appears at nine-day EMA

AUD/USD hovers near 0.6290 on Friday, maintaining position above the nine- and 14-day Exponential Moving Averages (EMAs) on the daily chart, signaling stronger short-term bullish momentum. Additionally, the 14-day Relative Strength Index (RSI) remains above the 50 level, reinforcing the bullish trend.

On the upside, the AUD/USD pair could test the seven-week high of 0.6330, last reached on January 24.

Immediate support lies at the nine-day EMA near 0.6260, followed by the 14-day EMA at 0.6254. A break below these levels could weaken the bullish outlook, potentially driving the AUD/USD pair toward 0.6087—the lowest level since April 2020, recorded on February 3.

AUD/USD: Daily Chart

By Ramya S|2025-02-10T06:19:02+05:30February 10, 2025 6:19 am|Forex|Comments Off

The Indian Rupee flatlines in Friday’s Asian session.
Rising RBI rate cut bets, weakness of Asian peers and uncertainties could undermine the INR.
RBI’s interest rate decision will be closely watched on Friday.

The Indian Rupee (INR) holds steady after falling to a fresh all-time low in the previous session. The local currency remains vulnerable amid expectations of a rate cut by the Reserve Bank of India (RBI). Furthermore, a broader decline among Asian currencies, the uncertainties surrounding US trade tariffs and continued portfolio outflows might undermine the INR.

Nonetheless, the routine intervention by the RBI to sell US Dollar via state-run banks might help limit the INR’s losses. The RBI interest rate decision on Friday will be in the spotlight. Investors will also scrutinize the statement from the new RBI Governor Sanjay Malhotra to assess the direction of the central bank’s monetary policy. The attention will shift to the US labour market data later in the day, including Nonfarm Payrolls (NFP), Unemployment Rate and Average Hourly Earnings.

Indian Rupee steadies ahead of RBI rate decision

The RBI is expected to cut the interest rate by 25 basis points (bps) to 6.25% at the policy meeting concluding on Friday, in what would be its first rate cut in nearly five years.
“The delay in implementation of universal tariffs by the incoming U.S. administration provides some tactical space for RBI to prioritize domestic growth… and space to cut policy rates,” said Ruhul Bajoria, an economist at Bank of America in India.
Most of the economists surveyed by Bloomberg anticipate that the Indian central bank will lower the benchmark repurchase rate by at least 25 basis points (bps) to 6.25% on Friday.
Chicago Fed President Austan Goolsbee noted on Thursday that the uncertainty makes the environment for the Fed foggier, a reason to slow the pace of cuts.
Dallas Fed President Lorie Logan said that while inflation progress has been significant, the US labor market remains far too firm to push the Fed into rate cuts any time soon.

USD/INR paints a positive picture, overbought RSI warrants caution for bulls in the short term

The Indian Rupee trades on a flat note on the day. The constructive outlook of the USD/INR pair remains intact as the price holds above the key 100-day Exponential Moving Average (EMA) on the daily chart. However, the 14-day Relative Strength Index (RSI) reaches overbought territory beyond the 70.00 mark, potentially signaling a temporary weakness or further consolidation in the near term.

The immediate resistance level for USD/INR emerges at 87.62, an all-time high. Sustained trading above this level could pave the way to the 88.00 psychological level.

On the downside, the initial support level for the pair is located in the 87.05-87.00 zone, representing the low of February 5 and the round mark. A breach of the mentioned level could drag USD/INR down to 86.51, the low of February 3.

By Ramya S|2025-02-10T06:17:18+05:30February 10, 2025 6:17 am|Forex|Comments Off