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01.12.2022 Market Report


EUR/USD is recovering ground to near 1.0450 in the early European morning, as the US Dollar comes under renewed selling pressure after USD/JPY crumbles on hawkish BoJ’s pivot. China’s reopening optimism adds to the Dollar’s downside. All eyes are on US PCE and ISM PMI. 


US Federal Reserve Chairman Jerome Powell’s first public appearance after November’s Federal Open Market Committee (FOMC) meeting turned out as dovish for the US Dollar as the policymaker stated that it makes sense to moderate the pace of interest rate increases. Fed’s Powell also suggested that the time to slow the pace of rate hikes could come as soon as the next meeting in December. On the same line were the latest comments from US Treasury Secretary Janet Yellen who teased a soft landing and pushed back the need for aggressive rate lifts.


USD/JPY came under intense selling pressure and approached 136.00, down over 1% on the day. The Japanese Yen rallied hard on comments from BoJ policymaker Noguchi, hinting at a potential exit from the central bank’s easy monetary policy. 


AUD/USD bulls take a breather around 0.6810, after refreshing the 13-week high, as concerns surrounding the US and China challenge the upside momentum during early Thursday. Also likely to have probed the Aussie buyers could be the cautious sentiment ahead of the key US data.


NZD/USD is marching north firmly after shifting its auction profile above the 0.6300 mark in the Asian session. The kiwi asset has refreshed its three-month high at 0.6335 as the New Zealand Dollar has been strengthened by a surprise rise in Caixin Manufacturing PMI data and a significant improvement in investors’ risk appetite post-Federal Reserve (Fed)’s commentary.


The US Dollar languishes near a multi-month low in the wake of dovish comments by Federal Reserve Chairman Jerome Powell on Wednesday and acts as a headwind for the USD/CAD pair. In fact, Powell sent a clear message that the US central bank will soften its stance and said that it was time to moderate the pace of interest rate hikes. This leads to an extension of the recent sharp decline in the US Treasury bond yields and keeps the USD bulls on the defensive.


The USD/CHF pair turned sideways around 0.9450 in the early Asian session. Federal Reserve (Fed)-inspired massacre in the asset was followed by a casual recovery from around 0.9430, and the asset has turned sideways now to ease sky-rocketing volatility.


Oil prices dipped in Asia trade on Thursday as uncertainty lingered ahead of Sunday’s OPEC+ meeting, though easing COVID curbs at the world’s top crude importer China capped price declines.


Gold price is consolidating the latest leg higher to fresh two-month highs near $1,780, as the United States Dollar (USD) wallows at multi-month troughs against its major peers. USD bears take a breather ahead of another set of critical United States economic data due later this Thursday.

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