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20.06.2023 Market Report


The EUR/USD pair struggles to gain any meaningful traction on Tuesday and oscillates in a narrow trading band, just above the 1.0900 round-figure mark through the Asian session. The US Dollar (USD) builds on its recent bounce from over a one-month low touched last Friday and edges higher for the third successive day.


GBP/USD remains defensive near 1.2780 as it struggles to justify the hawkish concerns about the Bank of England (BoE) ahead of the UK’s inflation data. The recently mixed concerns about the Federal Reserve (Fed) also prod the Pound Sterling traders as it struggles to extend the previous day’s U-turn from the highest levels since April 2022.


USD/JPY pares intraday gains at the seven-month high amid early Tuesday, falling from a multi-day peak of 142.25 to 142.00 by the press time. That said, the Yen pair previously cheered the US Dollar run-up and an upbeat start of the week by the Treasury bond yields to refresh the yearly top before retreating on the mixed catalysts.


AUD/USD bears occupy the driver’s seat around the 0.6800 round figure amid early Tuesday morning in Europe. With this, the Aussie pair not only bears the burden of the Reserve Bank of Australia’s (RBA) unimpressive Minutes but also the downbeat updates from the People’s Bank of China (PBoC), as well as hawkish concerns about the US Federal Reserve. It should be noted that the market’s cautious mood and a light calendar also favor the risk-barometer pair to print the biggest daily loss in a month, so far.


The NZD/USD pair lacks any firm direction and seesaws between tepid gains/minor losses, around the 0.6200 mark through the first half of the Asian session on Tuesday. The US Dollar (USD) builds on its bounce from over a one-month high touched last Friday and edges higher for the third straight day, which, in turn, is seen as a key factor acting as a headwind for the NZD/USD pair. The USD uptick could be attributed to a goodish pickup in the US Treasury bond yields, bolstered by rising bets for another 25 bps lift-off at the July FOMC meeting. This comes on the back of the Federal Reserve’s (Fed) hawkish outlook, signalling that borrowing costs may still need to rise by as much as 50 bps by the end of this year, and continues to lend some support to the buck.


The USD/CAD pair builds on the previous day’s modest recovery from its lowest level since September 2022 and gains positive traction for the second successive day on Tuesday. Spot prices maintain the bid tone through the Asian session and currently trade around the 1.3225-1.3230 region, up 0.15% for the day. Crude Oil prices remain depressed in the wake of worries that a global economic slowdown, particularly in China, will dent fuel demand. This, in turn, undermines the commodity-linked Loonie, which, along with a modest US Dollar (USD) strength, acts as a tailwind for the USD/CAD pair. It is worth recalling that the recent Chinese macro data showed that the world’s second-largest economy is struggling to sustain the momentum seen earlier this year.


The USD/CHF pair gains some positive traction for the third straight day on Tuesday and trades just above mid-0.8900s through the Asian session. The uptick, however, lacks bullish conviction, warranting some caution before positioning for an extension of the recent bounce from the 0.8900 mark, or over a one-month low touched last Friday. The US Dollar (USD) attracts some follow-through buying and recovers further from its lowest level since May 11, which is seen as a key factor acting as a tailwind for the USD/CHF pair. The Federal Reserve’s (Fed) hawkish outlook, signalling that borrowing costs may still need to rise as much as 50 bps by the end of this year, triggers a fresh leg up in the US Treasury bond yields and lends some support to the Greenback. That said, the incoming softer US economic data raised questions over how much headroom the US central bank has to keep raising rates. This, in turn, holds back the USD bulls from placing aggressive bets.


Oil prices retreated in Asian trade on Tuesday as investors weighed another interest rate cut in China against increasing pessimism over its economic prospects this year, while caution over U.S. monetary policy also persisted.


Gold price fades two-day-old bearish bias as it recovers from the intraday low amid the full market’s return. Even so, the yellow metal appears indecisive as a whole amid the mixed catalysts surrounding the US Federal Reserve (Fed) and China, as well as the market’s inaction.

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