Daily Market Report 25 Sep
Dollar under pressure on further rate cut hopes
The Dollar, which had initially traded stronger yesterday, closed weaker as markets bet on deeper rate cuts by the Fed. The DXY index fell to 100.25 as the Euro and Pound strengthened by 0.6% and 0.5% against the greenback, respectively. This morning, we have the Euro trading at 1.1200, the Pound at 1.3420, and the Yen at 143.22 as traders await fresh US economic, labour, and inflation data later this week. The Chinese Yuan hit a 16-month best level of 7.0170 this morning after authorities announced a raft of stimulus measures to try and boost the struggling economy. EM currencies, as well as the Aussie Dollar, have also firmed, but the Rand is trading softer. The Rand touched R17.22 levels yesterday as it firmed for the 10th consecutive day, eventually closing at R17.25. Currently, we have the local currency quoted at R17.31, and we are likely to continue to trade in a R17.20/R17.40 range for now.
Gold hits new high, base metals bounce
Continued optimism over US rate cuts, the softer Dollar, as well as further safe-haven demand saw Gold trade at $2,670.43 earlier this morning. We have since seen some consolidation and a bit of profit-taking with the price currently back at $2,658. Platinum and Palladium are a touch softer at $986 and $1,048, respectively, but base metals are all trading stronger. The Chinese stimulus measures have given hope of increased demand, pushing Copper, Nickel, Zinc, and Aluminium prices to jump. Brent crude also got a boost from the stimulus news and is currently trading just above the $75.00 mark. Geopolitical tensions in the Middle East and lower US crude inventories are also providing support.
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