Dollar Soars Amidst Market Jitters; Fed Powell and ECB Lagarde Remarks to Shape Market Outlook
| Action Insight Mid-Day Report 8-24-23 |
Dollar Soars Amidst Market Jitters; Fed Powell and ECB Lagarde Remarks to Shape Market Outlook |
A shift in market sentiment rattled investors as the optimism spurred by Nvidia was short-lived. DOW experienced its most severe daily slump since March overnight, while S&P 500 and NASDAQ posted their largest one-day drops since early August. This change in market dynamics played into the hands of Dollar, which surged, hitting weekly highs against major European currencies due to heightened risk aversion. Attention is now pivoting to Jackson Hole Symposium, where Fed Chair Jerome Powell's introductory remarks are eagerly anticipated. While no explicit insights are expected concerning Fed's upcoming September meeting, stakeholders are keen on gauging how Powell will straddle discussions about diverging trends in easing prices and wages, versus strong consumer spending and services inflation. Following Powell's address, the financial community will be tuning into ECB President Christine Lagarde's luncheon address, as well as the panel discussion that features luminaries like BoE Deputy Governor Ben Broadbent and BoJ Governor Kazuo Ueda. Technically, Dollar displayed notable strength in breaking firmly through 1.0801 temporary low in EUR/USD and 1.2613 temporary low in GBP/USD. Now, focuses will be on 146.55 temporary top in USD/JPY, 1.3602 temporary top in USD/CAD, and 0.6363 support in AUD/USD. Decisive break of there level will confirm the underlying bullish momentum in the greenback. In Asia, at the time of writing, Nikkei is down -1.97%. Hong Kong HSI is down -1.12%. China Shanghai SSE is down -0.45%. Singapore Strait Times is up 0.04%. Japan 10-year JGB yield is down -0.0284 at 0.649. Overnight, DOW dropped -1.08%. S&P 500 dropped -1.35%. NASDAQ dropped -1.87%. 10-year yield rose 0.037 to 4.235. |
| GBP/USD Daily Outlook Daily Pivots: (S1) 1.2551; (P) 1.2640; (R1) 1.2689; More... GBP/USD's fall from 1.3141 resumed and intraday bias is back on the downside. Next target is 61.8% projection of 1.3141 to 1.2618 from 1.2799 at 1.2476. Firm break there could prompt downside acceleration to 100% projection at 1.2276. On the upside, break of 1.2799 resistance is needed to confirm completion of the decline. Otherwise, near term outlook will stay bearish in case of recovery. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:30 | JPY | Tokyo CPI Y/Y Aug | 2.90% | 3.00% | 3.20% | | 23:30 | JPY | Tokyo CPI ex Fresh Food Y/Y Aug | 2.80% | 2.90% | 3.00% | | 23:30 | JPY | Tokyo CPI ex Food Energy Y/Y Aug | 4.00% | 4.00% | | 23:50 | JPY | Corporate Service Price Index Y/Y Jul | 1.70% | 1.20% | 1.20% | 1.40% | | 06:00 | EUR | Germany GDP Q/Q Q2 F | 0.00% | 0.00% | | 08:00 | EUR | Germany IFO Business Climate Aug | 86.6 | 87.3 | | 08:00 | EUR | Germany IFO Current Assessment Aug | 89.8 | 91.3 | | 08:00 | EUR | Germany IFO Expectations Aug | 83.8 | 83.5 | | 14:00 | USD | Michigan Consumer Sentiment Index Aug F | 71.2 | 71.2 |
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