Major currency pairs remained relatively calm on Monday, following last week’s volatile trading. With a light economic calendar and no high-impact macro releases, investors are focusing on headlines surrounding US-China trade relations.
During Asian trading hours, China reported that GDP grew 4.8% year-on-year in Q3, down from 5.2% in Q2 and in line with expectations. Retail sales rose 3% YoY, while industrial production expanded 6.5%, both reflecting resilient activity. The People’s Bank of China (PBOC) left its one-year and five-year Loan Prime Rates unchanged at 3.00% and 3.50%, respectively, as anticipated.
After a three-day slide, the US Dollar Index (DXY) closed slightly higher on Friday but lacks momentum to start the week, hovering around 98.50. Meanwhile, US stock index futures are rising between 0.35% and 0.55%, reflecting a mild improvement in risk appetite. US President Donald Trump over the weekend reiterated that he expects China to resume buying soybeans at previous levels, adding that he believes a deal on soybeans is achievable.
Gold (XAU/USD) retreated after hitting a record high of $4,380 on Friday, losing more than 1.5% in a deep correction. However, gold still posted a weekly gain of nearly 6% and is consolidating around $4,250 in early Monday trading.
NZD/USD holds modest gains above 0.5700, supported by New Zealand CPI data, which showed 1% quarterly growth in Q3, in line with expectations and up from 0.5% in Q2.
GBP/USD trades steady above 1.3400 in the European session after closing virtually unchanged on Friday. Investors are eyeing the UK CPI release on Wednesday.
The Bank of Canada (BoC) will publish its Business Outlook Survey later today. USD/CAD remains in a narrow range above 1.4000, following a fourth consecutive week of gains.
EUR/USD snapped a three-day winning streak on Friday, losing around 0.3%, and trades cautiously above 1.1650 early Monday.
In Japan, BoJ Board Member Hajime Takata said the central bank has roughly achieved its price target and highlighted the need to respond to headline inflation exceeding 2%. USD/JPY remains comfortably above 150.50 in early European trading.
