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Investors maintained a cautious mood at the start of the week as the US and Canada observe the Washington Birthday and Family Day respectively. Traders anticipate New Zealand’s first rate hike of 50 basis points in 2023. The People’s Bank of China kept its loan prime rate unchanged at 3.65%. President Joe Biden has made an unannounced visit to Kyiv, Ukraine, ahead of one year war anniversary.
NZDUSD dipped -0.23% as traders await the Reserve Bank of New Zealand rate decision due on Wednesday. The dollar edged higher on Monday as the risk mood was on the negative side on a thin trading day. Traders eye the FOMC meeting minutes for clarity on the direction of the tightening cycle following upbeat data from the US last week. Later in the day, New Zealand producer price index input for the last quarter will be due and expected to rise to 2.4% from 0.8% along with the output figures at 2.1% from 1.6%. The pair is currently capped by 0.6250 and may revisit 0.6150 if the 0.6200 low is breached.
EURAUD tanked -0.32% ahead of the Eurozone PMI data and inflation data. The AUD was up on Monday capitalizing on Friday’s gains. German’s preliminary manufacturing PMIs will be released on Tuesday with expectations settling at 47.8 from 47.3 in February. In Asian trade on Tuesday, the RBA will be publishing its meeting minutes The pair is currently trading below 1.5500 trimming down a 3-day winning streak to 1.5600. An intraday high resides at 1.5560 and may be challenged by a 1.5400 low.
CADZAR gained +0.45% rallying above the 13.400 mark on a low volatile day. The oil-linked CAD appreciated along with surging crude oil prices on the day. South Africa’s Producer Price Index for January will be released on Thursday. The pair’s upside rally may be capped by 13.5370 and 13.640.
European stocks fell on Monday as Telecom Italia led the slide by a -3%. The FTSE100 was flat at -0.06% as targets may be seen at 7950 on the downside. CAC40 lost -0.35% after a failure to breach the 7400 resistance. Sellers may revisit 7200 if the slide is extended. The German 40 fell by -0.20% trading between 15550 and 15430.
US stock futures remained unchanged at the open of the week as investors focus on Fed Meeting Minutes. US500 futures were down -0.07% as bulls retracted from the 4150 level and 4050 remains a key support. US100 futures were slightly higher by +0.04% and key levels to watch out for are 12800 resistance and 12200 support. US30 plunged by -0.15% towards the 33500 support level following the failure of bulls to break the 34200 resistance.
In commodities, gold extended its rebound by +0.14% as bulls attempt to reclaim the 1850 level. A failure to break above that level could trigger further selling pressure towards the 1800 level. However a break above that near-term barrier, bulls could target the 1870 level. Fed minutes meeting will be a key event of the week on interest rates guidance.
