EUR/USD: ECB for gradual adjustment of rates in the eurozone
The EUR/USD pair shows a moderate decline, holding near the 1.1150 mark: market activity remains low, which limits the potential of the euro to update record highs.
Macroeconomic statistics published the day before in the EU did not have a significant impact on the dynamics of the pair: the revised estimate of German GDP for the second quarter showed an increase of 0.3% in annual terms, but a decrease of 0.1% in the quarter. These data may become an additional argument for the European Central Bank (ECB) in favor of maintaining a "dovish" policy. At the same time, the revision of German GDP excluding seasonal fluctuations from -0.1% to 0.0% did not lead to significant changes in the market. Traders also drew attention to the deterioration in consumer confidence: the September index from Gfk Group fell from -18.6 to -22.0 points, despite expectations of -17.5 points. On Thursday, the final inflation data for August in Germany will be presented, where it is expected to slow from 2.3% to 2.1% in annual terms and from 0.3% to 0.1% on a monthly basis.
At the same time, the head of the Croatian People's Bank, Boris Vujicic, said that inflation is developing in accordance with forecasts, which makes it possible to gradually reduce the cost of borrowing, although risks remain, since inflation in the service sector continues to hold at 4.0%, and wage growth in the eurozone in the second quarter decreased to 3.6% from 4.7%. Olli Rehn, a member of the ECB's Governing Council, supported this position, pointing out that the process of stabilizing price growth has been underway since the autumn of 2022, and decisions will be made based on the latest macroeconomic data.
- Resistance levels: 1.1200, 1.1243, 1.1300, 1.1350.
- Support levels: 1.1150, 1.1100, 1.1047, 1.1000.
GBP/USD: British households are ramping up spending
The GBP/USD currency pair has rolled back from the March 2022 highs reached a day earlier, and is now experiencing pressure from the 1.3240 level for a possible decline.
The market reaction to the UK consumer spending data played a key role in this move. The report showed that the average weekly household spending reached 567.7 pounds, which is 7.0% higher than last year. A noticeable reduction in spending occurred in the food and non-alcoholic beverage categories, with a return to 2020 spending levels in key categories, while spending in cafes and restaurants continued to decline, reaching a 2020 low. Average wages decreased by 3.0%, reflecting a deterioration in purchasing power.
At an economic symposium in Jackson Hole, the head of the Bank of England, Andrew Bailey, said that despite the slowdown in inflation, the final victory over it has not yet been achieved. The consumer price index fell from a 41-year high of 11.1% in October 2022 to 2.0% in May and June. It is expected that statistics on the dynamics of lending in July will be published on Friday, it is expected to accelerate from 1.162 billion pounds to 1.3 billion pounds, which may support the exchange rate of the national currency.
- Resistance levels: 1.3280, 1.3470.
- Support levels: 1.3180, 1.3000.
NZD/USD: ANZ points to the role of the RBNZ in the downturn in the real estate market
The NZD/USD currency pair showed a moderate decline, hovering around the 1.1150 level, ahead of the expected rate cut by the US Federal Reserve. Fed Chairman Jerome Powell last week at an Economic symposium in Jackson Hole confirmed plans to adjust monetary policy, although he did not specify the specific parameters of possible changes before the end of the year.
On the other hand, the latest economic data from New Zealand showed a 1.2% decline in retail sales in the second quarter after a 0.4% increase in the previous period, which puts pressure on the New Zealand dollar. Data on consumer confidence and building permits are also expected to be published, which may provide additional information on the state of the economy. In the United States, key inflation indicators are to be released, which may influence the Fed's further actions.
ANZ experts emphasize the weakness of the New Zealand real estate market and the inconsistency of economic indicators, which may affect the decisions of the Reserve Bank of New Zealand on monetary policy in the face of uncertainty in key economic sectors. These factors, coupled with international economic trends and political decisions, shape the dynamics of NZD/USD in financial markets.
- Resistance levels: 0.6254, 0.6300, 0.6330, 0.6368.
- Support levels: 0.6221, 0.6200, 0.6177, 0.6153.
Silver market analysis
As of August 28, 2024, the price of silver is hovering around the level of $29.68 per ounce, which is 1.40% lower compared to the previous trading session. This decrease is due to market volatility and the influence of macroeconomic factors, including weak economic data from China and Europe.
The economic situation in China continues to put pressure on silver prices. The second quarter of 2024 showed weak GDP growth in China, which caused unexpected steps by the People's Bank of China to reduce interest rates. This step is aimed at supporting the economy, but weak data on manufacturing activity and declining domestic demand continue to negatively affect demand for silver, especially in the industrial sector, which depends on the metal for electronics and renewable energy production.
In addition, there is a slowdown in economic activity in Europe. Weak manufacturing activity (PMI) indicators in the eurozone continue to put pressure on silver, which in turn supports expectations for a rate cut by the European Central Bank before the end of the year. It also affects the mood of investors who are cautious amid uncertainty in the global economy.
- Resistance levels: $30.00, $31.00.
- Support levels: $28.50, $27.50.