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25.05.2023 Market Report


EUR/USD is under pressure near monthly lows, falling toward 1.0700 in early Europe. The pair remains weighed down by the US debt-ceiling uncertainty-led cautious market mood, which underpins the safe-haven US Dollar. Focus stays on ECB-speak ahead of US data. 


The GBP/USD pair has shown some recovery after printing a fresh six-week low at 1.2332 in the early European session. The Cable is expected to resume its downside journey after a less-confident pullback as investors have underpinned the risk-aversion theme due to the pending US debt-ceiling raise.


USD/JPY remains on the front foot, despite the latest pullback from the Year-To-Date (YTD) high of near 139.50 as Tokyo opens for Thursday’s trading. In doing so, the Yen pair justifies the market’s rush towards risk safety that propels the US Dollar and the Treasury bond yields. Additionally, fears surrounding the fall in Japan’s birth rate and its economic consequences also weigh on the Japanese Yen (JPY) and fuel the pair prices.


The AUD/USD pair found support after a vertical fall to near 0.6530 in the early Tokyo session. An absence of recovery in the Aussie asset after gauging a support indicates lack of strength in the Australian Dollar, which advocates further decline ahead.


The NZD/USD pair has slipped sharply below the round-level support of 0.6100 in the Tokyo session. The Kiwi asset has faced immense selling pressure after Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr commented on the drawbacks of pushing interest rates well above what was previously considered neutral.


USD/CAD seesaws at the highest levels in three weeks, marked recently, as bulls prod the 1.3600 mark during early Thursday amid broad US Dollar strength. In doing so, the Loonie pair pays little attention to the mildly bid WTI crude oil price, Canada’s key export item.


The USD/CHF pair has turned sideways after a mild correction from 0.9060 in the Asian session. The Swiss Franc asset refreshed its five-week high at 0.9067 and is now gathering strength for extending the rally further.


Oil prices fell slightly in Asian trade on Thursday, capping off three days of gains amid growing pressure from a strong dollar, while uncertainty over the U.S. debt ceiling persisted as a June deadline to reach a deal grew closer. Crude prices also saw some profit taking after racing to three-week highs in the prior session. The rally was largely driven by expectations of tighter U.S. supplies as the travel-heavy summer season approaches.


Gold struggles for clear directions as bulls and bears jostle around a short-term key support line nearing $1,955 heading into Thursday’s European session. In doing so, the yellow metal portrays the market’s indecision amid mixed signals surrounding the US debt limit extension talks and the US Federal Reserve (Fed).

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