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12.05.2023 Market Report


EUR/USD retreats from an intraday high of 1.0925 but stays sluggish during early Friday in Europe as traders lick their wounds on the way to posting the biggest weekly loss in three months. 


GBP/USD stays defensive near 1.2520 even as it renews intraday high ahead of the all-important UK Gross Domestic Product (GDP) data during early Friday. Not only the pre-data positioning but the market’s downbeat expectations and fears of a positive surprise also allow the Pound Sterling to pare recent losses.


The USD/JPY pair struggles to capitalize on the overnight bounce from the 133.75 area, or a one-week low and oscillates in a narrow trading band through the Asian session on Friday. The pair is currently placed just above mid-134.00s, nearly unchanged for the day, and is influenced by a combination of diverging forces.


AUD/USD is flat at around 0.6700 in Tokyo, correcting from the US session lows.  In the US data, prices are rising, but more slowly than expected. The PPI data for April increased 0.2% MoM with annual growth now at 2.3% YoY. Petrol prices in the US lifted more slowly than expected, while food prices actually fell. Core prices are now up 3.4% YoY.


The latest monetary conditions survey, conducted by the Reserve Bank of New Zealand (RBNZ), revealed on Friday that New Zealand’s (NZ) inflation expectations decline further across the time horizon in the second quarter of 2023. Two-year inflation expectations, seen as the time frame when RBNZ policy action will filter through to prices, dropped sharply to 2.79% from 3.30% prior.


USD/CAD is flat in the Toyo opening hour on Friday whereby the pair rallied from a low of 1.3375 to a high of 1.3495. CAD was therefore posting its biggest decline since early March, as oil prices dropped and US economic data added to evidence that the economy is slowing down. First, in the US data, the number of Americans filing new claims for unemployment benefits leaped to a 1-1/2-year high last week, and producer prices rebounded modestly in April. U.S. weekly initial unemployment claims rose +22,000 to 264,000, showing a weaker labor market than expectations of 245,000.


USD/CHF remains at the 0.8920 mark heading into Friday’s European session. In doing so, the Swiss Franc (CHF) pair bears the burden of the market’s cautious mood ahead of the key US inflation data for April.


Oil prices fell further on Friday after wiping out all of their gains for the week, as disappointing economic signals from China and concerns over a potential U.S. recession cast doubts over crude demand this year.


Gold price is falling for the third straight day this Friday, hitting the lowest level in five days near $2,010. Gold sellers remain in control, as the United States Dollar (USD) clings to recovery gains amid a cautious market mood.

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