2023-12-27 04:49

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies stuck to a tight range on Wednesday, while the dollar languished near five-month lows amid persistent bets that the Federal Reserve will begin cutting interest rates early in 2024. Regional currencies logged sharp gains in December after the Fed said it was done raising interest rates, with recent softer-than-expected inflation data suggesting that the bank could trim rates by as soon as March 2024. But December’s gains only served to trim steep losses in Asian currencies so far this year, as high U.S. interest rates and a largely resilient dollar spurred steady outflows from risk-heavy, high-yielding currencies through the year. Most Asian units were set for a muted end to 2023, although their outlook appeared somewhat brighter as the Fed flagged plans for interest rate cuts in the coming year. But while markets were optimistic over early cuts, the bank provided little cues on the timing of the planned cuts. Yen lags, worst-performing Asian currency in 2023 Dovish signals from regional central banks also weighed on some Asian currencies. The Japanese yen fell 0.1% after the summary of opinions of the Bank of Japan’s December meeting showed most policymakers supported keeping monetary policy ultra-dovish in the near-term. While the central bank has flagged plans to eventually begin tightening policy in 2024, it provided scant cues on the timing of such a move A dovish BOJ made the yen the worst-performing Asian currency in 2023, with the unit set for an over 8% loss against the dollar this year. Broader Asian units were also set for an underwhelming performance in 2023, as most regional central banks paused their rate hike cycles this year amid some cooling in inflation. The Australian dollar rose 0.2% on Wednesday and was set to rise 0.2% in 2023. Focus was also on a Reserve Bank of Australia meeting next week, with the bank widely expected to keep rates on hold. The Indian rupee was set to lose 0.6% in 2023 after sinking to record lows earlier in the year, while the South Korean won was down nearly 3% for the year. The Chinese yuan was also among the worst performers for 2023, and was set for a 3.6% loss this year amid worsening sentiment towards the country. A post-COVID economic rebound largely failed to materialize this year. Focus was now on purchasing managers index data for December, due next week, after a series of weak prints over the past three months. Dollar at 5-mth low, set for underwhelming end to 2023 The dollar index and dollar index futures moved little in Asian trade on Wednesday, and remained pinned at five-month lows. The currency was set to lose nearly 2% in 2023, with a bulk of its losses coming in December after the Fed signaled it was done raising interest rates and will look at cuts in 2024. The signals saw traders pivoting out of the dollar and into more risk-driven assets. Markets now expect the Fed to cut rates between three to five times in 2024, although the bank has given few signals on the breadth of the planned rate cuts. Fed officials also recently warned that bets on early rate cuts were unfounded, especially as inflation remained sticky. https://www.investing.com/news/forex-news/asia-fx-rangebound-dollar-at-5mth-low-as-rate-cut-bets-persist-3263794

2023-12-27 01:55

Copyrighted Image by: Reuters. Investing.com -- Oil prices fell Wednesday, handing back some of the previous session’s gains, as shipping companies returned to the Red Sea despite fresh attacks, stabilizing supplies through this crucial region. By 09:15 ET (14.15 GMT), the U.S. crude futures traded 0.4% lower at $75.27 a barrel and the Brent contract dropped 0.3% to $80.59 a barrel. Shipping giants reschedule Red Sea routes Both the benchmark contracts gained over 2% on Tuesday as further attacks by Yemen's Iran-backed Houthi militia on ships in the Red Sea prompted more fears of shipping disruptions. However, major shipping firms such as Maersk and France's CMA CGM have resumed passage through the Red Sea following the deployment of a multinational task force to the region. Denmark's Maersk said on Wednesday it has scheduled several dozen container vessels to travel via the Suez Canal and the Red Sea in the next several weeks, in a further sign that global shipping firms are returning to the route. Germany's Hapag-Lloyd is also expected to decide whether to resume shipments soon. U.S. added to its strategic reserve The crude market had also received a boost earlier this week with the news that the United States has agreed to purchase three million barrels of oil to help replenish the Strategic Petroleum Reserve. The Biden administration had conducted sales last year, including a record one of 180 million barrels, to help control oil prices after Russia’s invasion of Ukraine. U.S. inventories delayed a day Focus was now on U.S. inventory data, due later on Wednesday and Thursday, for more cues on supply in the world’s largest fuel consumer. The release of this week’s inventory data was delayed by a day, due to the Christmas holiday on Monday. A series of builds in U.S inventories over the past few weeks have rattled oil markets, especially as rising gasoline and distillate stockpiles pointed to cooling fuel demand in the country. Oil set for 2023 losses Despite recent gains, Brent and WTI futures were still set to lose around over 6% each in 2023. Concerns over top importer China - as an economic rebound failed to materialize - were a major weight on prices, as were fears of a slowdown in global crude demand due to high interest rates and inflation. Oil supplies are also expected to be less tight than initially expected in early-2024, following underwhelming production cuts from the Organization of Petroleum Exporting Countries, while U.S. output remained at record highs. https://www.investing.com/news/commodities-news/oil-prices-dip-after-rallying-on-red-sea-woes-us-spr-refill-3263774

2023-12-26 05:48

Copyrighted Image by: Reuters. Investing.com-- Gold prices rose in low-volume Asian trade on Tuesday, breaking out of a trading range seen through most of December as soft U.S. inflation data fueled more bets on early interest rate cuts in 2024. The yellow metal saw a strong run of gains in recent sessions, following a weaker-than-expected reading on the PCE price index- the Federal Reserve’s preferred inflation gauge. The reading, which came following dovish signals from the Fed during its final meeting for 2023, ramped up hopes that the central bank could begin trimming interest rates by as soon as March 2024. This notion presented a strong outlook for gold, given that high interest rates push up the opportunity cost of investing in bullion. Spot gold rose 0.5% to $2,064.16 an ounce, while gold futures expiring in February rose 0.3% to $2,075.10 an ounce by 23:58 ET (00:58 GMT). Spot gold also broke out of a $2,000 to $2,050 trading range established in most of December, and was now trading less than $100 away from a record high of over $2,130 an ounce hit at the beginning of the month. March rate cuts bet strengthen after soft PCE inflation Softer-than-expected PCE inflation data released on Friday saw traders ramp up bets that the central bank will begin cutting interest rates by as soon as March 2024. CME Group’s FedWatch tool showed traders pricing in an over 70% chance for a 25 basis point cut in March 2024. Goldman Sachs said the central bank will follow up a March cut with two more cuts in the first half of 2024, and will also cut rates another two times later in the year. But a slew of Fed officials warned that bets on early rate cuts by the central bank may be overly optimistic. Still, the dollar slid to a near five-month low on Tuesday, while Treasury yields also tumbled. Gold benefited from this trade. The yellow metal may also benefit from worsening global economic conditions in the coming year, as the effects of tight monetary policy are felt by major economies. Copper prices steady, 2024 outlook appears upbeat Among industrial metals, copper prices rose in Asian trade on Tuesday, extending a run of recent gains amid some optimism over the red metal’s prospects in 2024. Copper futures expiring March rose 0.4% to $3.9153 a pound. While a recent drop in the dollar was a key point of support for the red metal, expectations of improving demand in 2024 also aided copper, especially amid increasing demand for electric vehicles across the globe. The red metal is a key component in batteries and electronics. Copper supplies are also expected to tighten on the back of major mine closures in Panama and Peru. https://www.investing.com/news/commodities-news/gold-prices-cross-2060-as-soft-inflation-heralds-2024-rate-cuts-3263323

2023-12-26 04:16

Copyrighted Image by: Reuters. Investing.com-- Most Asian currencies moved in a tight range on Tuesday, while the dollar hovered near five-month lows as soft U.S. inflation data spurred increasing bets on interest rate cuts from the Federal Reserve in 2024. Trading volumes were muted on account of year-end holidays in several major markets. A light economic release schedule this week also pointed to few novel cues for markets. Still, a weaker dollar and optimism over rate cuts in 2024 put most Asian currencies on course for strong gains in December. Recent gains also helped Asian currencies recover a measure of losses against the dollar over the past year. Japanese yen sees some strength as BOJ talks pivot The Japanese yen rose 0.1% on Tuesday, as Bank Of Japan Governor Kazuo Ueda flagged some progress towards achieving the central bank’s 2% annual inflation target. Progress towards the inflation target raises the possibility of an early policy pivot by the BOJ, Ueda said. The BOJ has kept interest rates at negative levels for nearly eight years. The bank is still expected to pivot away from its ultra-dovish stance in 2024, although it has given scant cues on the timing of such a move. Still, a more hawkish BOJ bodes well for the yen, which was battered by rising U.S. interest rates through 2023. Data released last week showed Japanese inflation fell sharply in November, and was now closer to the BOJ’s annual target. Broader Asian currencies also advanced tracking a softer-than-expected reading on the U.S. PCE price index- the Fed’s preferred inflation gauge. The Australian dollar rose 0.3% in holiday trade, while the South Korean won and the Singapore dollar added 0.2% each. The Taiwan dollar rose 0.5%, while the Indian rupee lagged its peers, trading sideways near record lows. The Chinese yuan also lagged its peers, falling 0.1% amid persistent concerns over an economic slowdown in China. This notion was a key weight on the yuan through 2023, and limited a recovery in the currency over the past month. Focus is now on Chinese purchasing managers index data for December, due next week. Dollar at 5-mth low as early rate cut bets grow The dollar also saw extended losses after the PCE reading, amid growing bets that the Fed could cut interest rates by as soon as March 2024. The dollar index and dollar index futures fell 0.1% each in Asian trade, and were at their weakest since late-July. But the PCE reading still remained well above the Fed’s 2% annual target. The reading also came on the heels of warnings from several Fed officials that bets on early interest rate cuts were overly optimistic. The CME Group’s Fed Watch tool shows markets pricing in an over 70% chance the Fed will cut rates by 25 basis points in March. But the bank will also have much more U.S. economic data to consider in the interim. https://www.investing.com/news/forex-news/asia-fx-rises-dollar-at-5mth-low-as-soft-inflation-fuels-rate-cut-bets-3263291

2023-12-26 01:42

Copyrighted Image by: Reuters. Investing.com-- Oil prices kept to a tight range in holiday-thinned Asian trade on Tuesday, as markets weighed the prospect of continued supply disruptions in the Red Sea against fears of higher production in 2024. Crude prices saw some strength over the past week as attacks by the Iran-aligned, Yemeni Houthi group on vessels in the Red Sea disrupted shipping routes in the region, pointing to some potential delays in oil deliveries through the Suez Canal. But further gains in oil prices were held back by the prospect of higher production in 2024, as Angola left the Organization of Petroleum Exporting Countries (OPEC) on disagreements over recent production cuts. The African nation is now expected to increase output in the coming year. U.S. production was also seen at record highs in December, as the country stepped in to fill an output gap left by recent production cuts from the OPEC. High U.S. production, coupled with largely underwhelming cuts from the OPEC, pushed up concerns over oversupplied oil markets in 2024, presenting a weak outlook for prices. Brent oil futures expiring in February fell 0.4% to $79.04 a barrel, while West Texas Intermediate crude futures were flat at $73.76 a barrel by 20:15 ET (01:15 GMT). Trading volumes were limited with Christmas holidays in several major markets. Oil prices set for steep losses in 2023 as demand fears persist Brent and WTI prices were set to lose around 8% each in 2023, as a string of production cuts from the OPEC did little to offset persistent concerns over worsening crude demand. A post-COVID recovery in top oil importer China largely failed to materialize this year, while major euro zone economies slipped into recession amid high inflation and tighter monetary conditions. While the U.S. economy largely bucked this trend, markets remained unsure whether steady demand in the world’s largest fuel consumer would be sufficient to offset a decline in global consumption. Recent weakness in the dollar offered some respite to oil prices, as data showed that inflation was cooling steadily in the U.S.. The trend is expected to attract interest rate cuts by the Federal Reserve in 2024, although the timing of such a move remains uncertain. https://www.investing.com/news/commodities-news/oil-prices-flat-as-markets-weigh-red-sea-tensions-output-uncertainty-3263274

2023-12-22 05:50

Copyrighted Image by: Reuters Investing.com-- Gold prices rose on Friday, extending gains from the prior session after a mild downgrade to third-quarter U.S. GDP and soft labor market data put the dollar at four-month lows. Focus was now squarely on key inflation data due later in the day for more affirmation that the Federal Reserve will cut interest rates in 2024. Friday’s gains saw spot gold come close to breaking out of a $2,000-$2,050 an ounce trading range established over the past week, as gold bulls welcomed signs of a cooling U.S. economy. Spot gold rose 0.2% to $2,049.20 an ounce, while gold futures expiring February rose 0.5% to $2,060.65 an ounce by 00:16 ET (05:16 GMT). Both instruments were at over two-week highs, and were also set for an over 1% gain this week. Dollar sinks after GDP, unemployment readings; PCE inflation in sight Gold’s gains came after the dollar hit more than four-month lows on Thursday. A revised reading on third-quarter GDP showed the U.S. economy grew slightly less than initially expected. The reading still showed the U.S. economy growing far more than its peers in the developed world. But a smaller-than-expected rise in weekly jobless claims ramped up hopes for a cooling labor market. Cooling economic growth points to softer inflation and labor activity- two main points of consideration for the Fed in trimming interest rates. PCE price index data- the Fed’s preferred inflation gauge- is due later on Friday. The reading is still expected to remain well above the Fed’s 2% annual target- a trend that could see the central bank push any interest rates later into 2024. Expectations of rate cuts by as soon as March 2024 drove strong gains in gold over the past week, although several Fed officials warned that bets on early monetary easing by the Fed were overly optimistic. Still, the yellow metal was now trading less than $100 away from a record high hit earlier in December, as it benefited from the prospect of lower interest rates. High rates push up the opportunity cost of investing in gold. Copper steadies near 4-mth high on 2024 prospects Among industrial metals, copper prices moved little on Friday, but hovered near their highest levels since early-August. Copper futures expiring March were flat at $3.9253 a pound, and were set for a 0.9% weekly gain- their second straight week in black. Prices of the red metal were boosted by the prospect of lower interest rates in 2024, which is expected to boost global economic activity and shore up copper demand. An increasing push into green energy and electric vehicles is also expected to boost demand, while copper supplies are expected to tighten amid mine closures in Peru and Panama. https://www.investing.com/news/commodities-news/gold-prices-surge-as-dollar-hits-4mth-low-inflation-data-awaited-3262079