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12.12.2023 Market Report


EUR/USD is trading above 1.0750, confined in a narrow trading band for the second straight day on Tuesday. Broad US Dollar retreat and a cautious mood have kept the pair sidelined. Traders now look to US CPI for fresh impetus amid dovish Fed/ECB pricing.


GBP/USD clings to small daily gains above 1.2550 after the UK jobs report, which showed a further softening in wage inflation in October. Later in the day, November Consumer Price Index (CPI) data from the US will be watched closely by market participants.


The USD/JPY has pared back the majority of losses from last week’s Bank of Japan (BoJ)-fueled plunge, pulling back from four-month lows below 142.00 to aim squarely at the 147.00 handle. The pair has walked back around 80% of last Thursday’s declines that were kicked off by an unexpectedly hawkish showing from BoJ Governor Kazuo Ueda, who noted that the Japanese central bank could be set to begin exploring tighter monetary policy as long as wages continue to show firm growth.


The AUD/USD pair remains confined in a tight range of 0.6550-0.6575 during the early Asian session on Tuesday. A firmer US Dollar (USD) weighs on investor appetites and creates headwinds for the pair. At press time, AUD/USD is trading around 0.6565, down 0.02% for the day.


The NZD/USD pair gains traction during the early Asian session on Tuesday. The pair holds positive ground for the second consecutive day despite the firmer US Dollar (USD). Investors will take cues from the US economic data and the Federal Open Market Committee (FOMC) rate decision ahead of the New Zealand growth numbers on Thursday. The pair currently trades around 0.6125, unchanged for the day.


USD/CAD continues its losing streak for the third successive day as the US Dollar Index (DXY) turns negative post two days of gains. The USD/CAD pair trades lower around 1.3560 during the Asian session on Tuesday. Moreover, Crude oil prices hold steady after a three-day winning streak, potentially providing support for the Canadian Dollar (CAD).


USD/CHF hovers around 0.8770 during the Asian trading hours on Tuesday, extending its losses for the second consecutive day ahead of US Consumer Price Index (CPI) data. The US Dollar Index (DXY) loses ground on downbeat US Treasury yields. The DXY moves below 104.00, with yields on 2-year and 10-year US bond coupons standing lower at 4.70% and 4.21%, respectively, by the press time.


Oil prices ticked up on Tuesday but investors remained cautious ahead of key interest rate decisions and inflation data releases, while concerns over excess supply and slowing growth in demand kept a lid on gains.


Gold price is catching a breather in the Asian session on Tuesday, following two straight days of decline. Gold traders now look forward to the all-important United States Consumer Price Index inflation data for a fresh directional impetus.

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