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16.01.2023 Market Report


EUR/USD has refreshed its eight-month high above 1.0870 amid a positive risk-impulse. Volatility in the USD Index has escalated as the appeal for safe-haven assets has dropped. After slowing the extent of the interest rate hike to 50 bps, the Fed is expected to trim rate hike pace further to 25 bps.


GBP/USD has started a new week with a bang, extending the previous week’s uptrend into the third straight day on Monday. Pound Sterling bulls benefit from a broadly weaker US Dollar, as risk sentiment remains in a firmer spot so far this session.


USD/JPY is holding the latest downtick below 127.50, having renewed eight-month lows at 127.24. Bears remain in control at the start of the week on Monday, as the Japanese Yen extends its bullish momentum.

Hopes that the Bank of Japan (BoJ) could surprise markets with a hawkish pivot at its policy meeting this week are underpinning the sentiment around the Yen, especially after the Japanese central bank failed to defend its yield curve control (YCC) policy for the second day in a row. 


The AUD/USD pair kicks off the new week on a positive note and climbs to its highest level since mid-August during the Asian session. The pair, however, trim a part of its intraday gains and retreat below the 0.7000 psychological mark in the last hour.


The NZD/USD pair is facing hurdles in surpassing the immediate mark of 0.6400 in the Tokyo session. The Kiwi asset is expected to extend its rally to near the 0.615 mark amid optimism in market sentiment. An improvement in the risk appetite of the market participants is further strengthening the S&P500 futures despite a four-day winning streak. Meanwhile, the US Dollar Index (DXY) is on the verge of testing a seven-month low around 101.60.


The USD/CAD pair struggles to capitalize on Friday’s bounce from the 1.3320 area, or its lowest level since November 25 and meets with a fresh supply on the first day of a new week. The pair remains on the defensive through the Asian session and is currently placed near the daily low, around mid-1.3300s.


The USD/CHF pair is displaying topsy-turvy moves in the early Tokyo session as the upside in the asset is capped around 0.9300 while the downside is restricted at 0.9250. The Swiss franc asset has turned sideways, defending the risk-appetite theme in the market.


Oil prices fell on Monday after a sharp rally last week, as traders turned cautious and locked in some profits ahead of demand forecasts from the OPEC and the IEA, as well as a barrage of economic data due this week.


Gold price is taking a breather near the highest level seen since April 2022 at $1,929, as investors contemplate the next move amid a holiday in the United States. The US stocks and bond markets are closed on Monday, in observance of Martin Luther King Jr. Day.

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