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14.12.2023 Market Report


EUR/USD is trading close to 1.0900, looking to build on Wednesday’s hard rebound after the Federal Reserve (Fed) pivoted into a path toward rate cuts after months of towing the “higher for longer” line. ECB policy decision is next in focus. 


The GBP/USD pair surges to one-week highs above the 1.2600 mark during the Asian session on Thursday. The uptick of the pair is bolstered by the weaker US Dollar and the dovish comments after the Federal Reserve (Fed) meeting. Investors will closely watch the BoE interest rate decision ahead of US Retail Sales.


The Japanese Yen (JPY) trims a part of its strong intraday gains against the US Dollar (USD) and assists the USD/JPY pair to recover a few pips from sub-141.00 levels, or its lowest level since late July touched earlier this Thursday. The preavlent risk-on environment, as depicted by an extension of the recent rally across the global equity markets, is seen as a key factor undermining the JPY’s relative safe-haven status. That said, speculations that the Bank of Japan (BoJ) may exit its negative rate policy sooner than anticipated, before the results of labor talks at large companies are known, might continue to boost the domestic currency.


The AUD/USD is catching a firm risk-bid as markets surge higher following a dovish pivot to the  Federal Reserve’s (Fed) policy stance; the Fed now sees at least three rate cuts in 2024, for a combined 75 basis points in rate cuts next year. The Australian Dollar (AUD) is one of the best-performing currencies of the majors bloc, seeing a firm bullish break to climb 1.5% against the US Dollar (USD) on the day.


The NZD/USD pair holds ground around 0.6175 after facing a rejection around the 0.6200 mark during the early Asian session on Thursday. The downbeat New Zealand’s GDP growth numbers drag the New Zealand Dollar (NZD) lower. However, the downside of the pair seems limited as investors digest the outcome of the Federal Reserve meeting.


The USD/CAD pair extends its downside below the 1.3500 mark during the early Asian session on Thursday. The decline of the US Dollar (USD) following the Federal Reserve (Fed) weighs on the pair. At press time, USD/CAD is trading at 1.3488, down 0.07% for the day.


USD/CHF continues the losing streak for the fourth successive day ahead of the Swiss National Bank’s (SNB) Interest Rate Decision, trading around 0.8670 during the Asian session on Thursday. SNB is anticipated to maintain its key interest rate until at least the third quarter of the following year, according to a majority of economists surveyed by Reuters.


Oil prices rose in Asian trade on Thursday, extending previous gains, on a bigger-than-expected weekly withdrawal from U.S. crude storage and hopeful demand expectations after the U.S. Federal Reserve sent signals on lower borrowing costs in 2024.


Gold price attracts some follow-through buying for the second straight day on Thursday. The US bond yields and the USD extend the post-FOMC slide, lending support to the metal. The risk-on environment caps gains for the XAU/USD ahead of the central bank bonanza.

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