Support
Yen gains as BoJ holds steady
Governor Ueda hinting at possible adjustments if economic goals are met
WTI crude prices rose on surprising inventory declines
Gold traded close to all-time highs
EUR/USD retracting from recent highs
Today’s trading saw cautious movement across major markets, driven by central bank updates and mixed economic signals. The Bank of Japan (BoJ) maintained its dovish stance, while US dollar demand limited gains in other major currencies. Oil markets, meanwhile, saw renewed optimism on US demand and inventory surprises.
Currencies
The Japanese yen edged higher after the BoJ held rates steady, with Governor Ueda signaling potential adjustments if economic targets are met, though he noted inflation could ease by 2025. This policy stability tempered gains for JPY, while the USD/JPY dropped by 0.3% amid broader dollar demand.
The EUR/USD pair experienced some sell pressure in early trading, retracting from recent gains near the 1.0870 level to the mid-1.0800s. The euro’s outlook remains sensitive to US economic data, with the PCE Price Index on the horizon, which could influence dollar sentiment and impact the EUR/USD pair further.
Commodities
WTI crude saw upward momentum, driven by an unexpected inventory drop of 0.515 million barrels against expectations of a 2.3 million-barrel increase. Additional support came from speculation that OPEC+ may delay a planned production hike, adding to positive demand sentiment.
Gold traded with a slight downside bias heading into the European session, though it remains close to all-time highs. While the metal lacks strong follow-through, expectations for smaller interest rate cuts from the Federal Reserve and concerns over the rising US fiscal deficit have kept US Treasury yields elevated. This pressure supports the dollar’s recent highs and dampens gold’s appeal amid overbought conditions.
Silver prices displayed resilience, with potential to regain strength as geopolitical risks and US election uncertainties boost safe-haven demand.
What to Expect – Economic Calendar Highlights:
Today’s US economic calendar includes the Core PCE Price Index (0.3% m/m expected), Employment Cost Index (steady at 0.9%), Unemployment Claims (expected at 229K), and Personal Income (0.3% forecast). Investors will closely watch these releases for any implications on Fed policy and market direction.
