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26.01.2023 Market Report


EUR/USD is holding steady above 1.0900 in the early European morning. The US Dollar consolidates near multi-month lows amid weaker Treasury yields and a cautious risk tone. Investors refrain from placing fresh bets on EUR/USD ahead of the critical US GDP release. 


GBP/USD is struggling to extend the previous gains at around 1.2400 heading into Thursday’s London open. The US Dollar is licking its wound alongside weaker US Treasury yields amid dovish Fed bets and pre-US GDP anxiety. 


As the USD/JPY pair fades recovery from an eight-month high, analysts at global investment banks like Goldman Sachs unveiled forecasts suggesting limited Yen appreciation in the short-term. In doing so, the quote also justifies the apparent US growth and no imminent exit from the Bank of Japan’s (BoJ) imminent exit from the Yield Curve Control (YCC) policy. That said, the US banker revised down its three-month and six-month price forecasts.


AUD/USD clings to mild gains above 0.7100 as bulls take a breather after refreshing the five-month high during early Thursday in Europe. That said, the Aussie pair traders cheer Hong Kong’s resumption of trading after five days, as well as hawkish hopes of the Reserve Bank of Australia (RBA) after the previous day’s strong Aussie inflation data. However, a cautious mood ahead of the first readings of the US fourth quarter (Q4) Gross Domestic Product (GDP) seems to challenge the quote’s upside. Additionally probing the AUD/USD buyers is the Australia Day holiday.


The NZD/USD pair has rebounded after a minor correction to near 0.6470 in the early Asian session. The kiwi asset is looking to recapture 0.6500 amid positive market sentiment. The New Zealand Dollar displayed sheer volatility on Wednesday after the release of the Q4CY2022 Consumer Price Index (CPI) data.


The USD/CAD pair has corrected marginally after a recovery move from 1.3380 in the Asian session. The Loonie asset is looking to shift its business above 1.3400 despite a recovery attempt from the US Dollar Index (DXY). The recovery attempt in the USD Index seems less confident amid the risk-on market mood.


USD/CHF stands on slippery grounds as it drops to 0.9170 during Thursday’s Asian session. The Swiss Franc (CHF) pair renews its intraday low to extend the previous day’s pullback from the weekly high.


The U.S. crude benchmark settled down 1.8% on Tuesday after rising nearly 15% over the past two weeks on bets of a huge pickup in demand from China, which this month abandoned COVID-related restrictions that had been weighing on energy usage in the world’s largest oil importer. 


Gold price is struggling to test the $1,950.00 mark as anxiety soars ahead of the US GDP. The USD Index is building a cushion around 101.10 but could deliver a breakdown amid a risk-on mood. Rising odds of a smaller interest rate hike by the Fed are weighing down US yields.

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