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18.01.2023 Market Report


EUR/USD stays on the bear’s radar as it slides to 1.0770 during the four-day south-run heading into Wednesday’s European session. In doing so, the major currency pair bears the burden of the broad US Dollar rebound, as well as receding hawkish bias over the European Central Bank’s (ECB) next move.


Pound Sterling has been outperforming other risk-perceived currencies this week as rising wages in the United Kingdom region are passing all checks for a continuation of sheer policy tightening by the Bank of England (BoE).


USD/JPY is rallying hard beyond 131.00 after the Bank of Japan (BoJ) announced no changes to its monetary and yield control policy on Wednesday. The Japanese yen is reversing a part of its recent uptrend, as the BoJ defies market pressure. Kuroda eyed. 


AUD/USD treads water around 0.6980-90 during early Wednesday, after reversing the week-start losses the previous day. In doing so, the Aussie pair portrays the market’s indecision ahead of the key US Retail Sales and the Producer Price Index (PPI) for December. Also likely to challenge the market’s performance, as well as the Aussie pair, could be the immediate release of the Bank of Japan’s (BoJ) monetary policy announcements.


The NZD/USD pair attracts fresh buying following an early dip to the 0.6375 area and jumps to over a one-month high during the latter part of the Asian session on Wednesday. The pair is currently placed around mid-0.6400s, up nearly 0.40% for the day, and has now moved well within the striking distance of a multi-month peak touched in December.


The USD/CAD pair attracts some sellers following an early uptick to the 1.3410 area dips into negative territory for the second straight day on Wednesday. The pair is currently placed near the daily low, around the 1.3380 region, and looks to extend the previous day’s pullback from the weekly top.


USD/CHF remains depressed as sellers approach the 0.9200 threshold, close to 0.9215 during the early hours of Wednesday’s Asian session. In doing so, the Swiss currency (CHF) pair cheers the US Dollar’s failure to benefit from upbeat Treasury bond yields and the softer Euro amid softer US data, as well as downbeat comments from the Federal Reserve (Fed) officials.


Oil prices extended gains on Wednesday as increasing optimism over a recovery in Chinese demand largely offset fears of a global economic slowdown in 2023, with the IEA’s monthly report now coming into focus.


Gold price is extending its correction from nine-month highs into the third straight day this Wednesday. Gold price is undermined by resurgent United States Dollar (USD) demand, despite the sell-off in the US Treasury bond yields.

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