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20.12.2022 Market Report


EUR/USD is dropping below 1.0600 after the latest whipsaw, ahead of the European open. The pair is feeling the pull of gravity as the US Dollar reverses losses, gaining support from the rally in the US Treasury yields led by the BoJ’s revision to its yield policy. 


GBP/USD is recovering ground above 1.2100 heading into Tuesday’s London open. Cable cuts losses, as the US Dollar rebounds amid firmer US Treasury yields. Markets remain unnerved amid the surprise BoJ policy move, weighing on the higher-yielding GBP. 


USD/JPY is on slippery grounds, down roughly 3% after the BoJ tweaked its YCC target from 0.25% to 0.50% and increased bond-buying. The BOJ held its benchmark rate unchanged at -0.10% The pair drags the US Dollar lower across the board. Eyes on BoJ Kuroda’s presser. 


AUD/USD pays little heed to the Reserve Bank of Australia’s (RBA) latest Monetary Policy Meeting Minutes while holding lower grounds near 0.6700 during early Tuesday. In doing so, the Aussie pair portrays the market’s cautious mood ahead of the other key catalysts, namely a meeting between Australian and Chinese diplomats, as well as a monetary policy meeting of the People’s Bank of China (PBOC).


NZD/USD has been chipping away at the downside in Asia, sliding to a fresh session low at the time of writing, down 0.35% on the day so far after dropping from a high of 0.6365. The US Dollar has been struggling to break higher which had been giving the commodity complex some room to breathe but the tables are turning.


USD/CAD clings to mild gains around 1.3700 as the US Dollar reverses the intraday losses heading into Tuesday’s European session. The Loonie pair’s run-up could also be linked to the downside move of Canada’s main export item, namely WTI crude oil.


The USDCHF has advanced gradually to a near 10-day high of around 0.9570 in the Asian session. The asset is struggling to extend gains ahead as investors are shifting their focus toward the release of the US Durable Goods Orders data, which is due on Wednesday.


Oil prices extended gains into a second consecutive session on Tuesday as markets bet that a Chinese reopening, U.S. buying, and a potentially colder-than-expected winter will spur a demand recovery going into 2023, despite increased fears of a global recession.


Gold price once again found fresh buyers near the $1,785 level and staged a solid bunce in early Tuesday. The sudden upswing in the Gold price could be attributed to a significant market reaction to a surprise hawkish BoJ policy shift. 

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