Market Update for September 19
Here’s a brief overview of what’s happening today, Friday, September 19.
Nvidia plans to inject $5 billion into Intel for developing AI infrastructure and PC chips, which is likely to set a positive tone in the markets, especially as Wall Street responds on Friday morning.
Furthermore, recent US economic data has alleviated some worries about the overall economic outlook, contributing to a risk-on sentiment in the market.
For instance, the number of new unemployment claims dropped to 33,000, adjusting to a total of 231,000 for the week ending September 13, which marks a reversal from the previous week’s spike to a level not seen since October 2021.
The Philadelphia Federal Reserve’s Manufacturing Index jumped to 23.2 in September, a significant increase from the anticipated recovery of 2.3.
Traders are also optimistic about US-China trade relations after President Trump suggested he might continue a trade truce with China’s President Xi Jinping during a phone call this Friday.
These factors will likely help the US Dollar (USD) maintain its recovery, bolstered by the Federal Reserve’s careful cuts to interest rates on Wednesday. Currently, the USD Index is showing a slight increase, resting near 97.50.
Interestingly, the Japanese yen (JPY) has performed notably well among the G10 currencies, largely due to the Bank of Japan’s (BOJ) hawkish stance, where board members voted 7-2 to keep the policy rate steady at 0.5% by initiating the sale of Exchange-Traded Funds (ETFs).
The strength of the yen is impacting the USD/JPY pair, which is hovering around 147.50, as traders await comments from BOJ Governor Huada.
In terms of GBP/USD, it’s dipped towards 1.3500 after a correction from a peak of 1.3726 earlier this week. Recent forecasts for UK retail sales data didn’t seem to spark much enthusiasm among pound buyers.
As for EUR/USD, it appears to be struggling to hold below 1.1800 against the stronger US dollar, while USD/CAD is fluctuating around 1.3800 amidst the dollar’s strength and declining oil prices.
Gold has been attempting to recover from a three-day low, with hopes of testing offers above the $3,650 mark. The outcome of the Trump-Xi call and other weekend developments could impact gold prices later today.
