EUR/USD is dribbling close to weekly top below 1.1400, as the US dollar remains on the defensive alongside the yields, in the aftermath of Fed Chair Powell’s testimony. Coronavirus woes, World Bank forecasts test immediate upside ahead of Eurozone industrial figures and the critical US inflation.
GBP/USD is trading close to two-month highs near 1.3650, helped by the recent pullback in the US dollar and yields. The risk sentiment remains lifted ahead of US inflation data. Brexit risks continue to loom, as UK’s Truss threatens to trigger Article 16.
USD/JPY was seen oscillating in a range through the early part of trading on Wednesday. A positive risk tone undermined the safe-haven JPY and extended some support to the pair. Powell’s less hawkish comments weighed on the USD and capped gains ahead of the US CPI.
AUD/USD is down to test 0.7200 on disappointing Chinese inflation figures for December, as market sentiment dwindles ahead of the US inflation release. Traders rethink Powell-led advances amid persistent coronavirus and global growth concern.
NZD/USD pair lacked any firm directional bias and remained confined in a narrow trading band near the weekly high, just below the 0.6800 mark through the early European session.
USD/CAD was making a fresh cycle low on Tuesday as oil continued to recover and print higher and as the US dollar melted. This was so despite sentiment for a faster run down of quantitative easing and a faster pace of interest rate hikes from the Federal Reserve. USD/CAD consolidates above the overnight night low of 1.2567.
NZSD/USD bull’s grit is being tested by the pullback. Bulls looking for a breakout of accumulation for the sessions ahead.
Amid US equities coming under some selling pressure at the Tuesday equity open, front-month WTI futures have pulled back from earlier session highs to the north of the $80 per barrel level and are now trading back in the $79.00 area. That still leaves WTI prices up more than 50 cents on the day and the oil bulls will still be eyeing a test of last week’s highs in the $80.50 area. Indeed, oil strategists continue to view the spread of the Omicron variant as not likely to leave a meaningful dent in near-term oil demand.
The yellow metal price outperformed on Tuesday and rose to its highest levels in four days at $1,823, in an extension of the recovery from three-week lows of $1,783. The main catalyst behind gold’s upsurge, undoubtedly remained the US dollar’s weakness.
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