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18.12.2023 Market Report


EUR/USD is trading back above 1.0900, catching a fresh bis in the early European morning on Monday. The pair benefits from a weaker US Dollar alongside the US Treasury bond yields amid divergent Fed-ECB policy outlooks. Investors await the German IFO survey for fresh impetus.


The GBP/USD pair attracts some dip-buying around the 1.2655 area during the Asian session on Monday and for now, seems to have stalled its retracement slide from the vicinity of the 1.2800 mark, or a near four-month peak touched last week.


The USD/JPY wrapped up last trading week struggling to develop momentum in either direction from the 142.00 handle after the US Dollar (USD) slumped against the Japanese Yen (JPY).


The AUD/USD pair hovers around the 0.6700 mark, its highest since July during the early Asian session on Monday. The anticipation of rate cuts by Federal Reserve (Fed) officials weighs on the US Dollar (USD) broadly and lends some support to the AUD/USD pair.


The NZD/USD pair trades in positive territory for the sixth consecutive day during the early Asian session on Monday. The pair posts the highest level in months due to the US dollar weakness. NZD/USD currently trades near 0.6224, gaining 0.20% on the day.


USD/CAD halts its three-day losing streak, trading around 1.3380 during the Asian session on Monday. However, The Canadian Dollar (CAD) received a boost against the US Dollar (USD) following the hawkish comments made by the Bank of Canada’s (BoC) Governor Tiff Macklem on Friday. Speaking at the Canadian Club Toronto, he mentioned that once the BoC is confident that the economy is clearly on a path back to price stability, they will consider whether and when to lower the policy interest rate.


USD/CHF retraces the recent gains on the subdued US Dollar (USD), which could be attributed to the lowered US Treasury yields. The USD/CHF pair trades lower around 0.8690 during the Asian hours on Monday, with 2-year and 10-year yields on US bond coupons standing lower at 4.41% and 3.91%, respectively.


Oil prices rose in Asian trade on Monday, rising nearly 1% in early trade, supported by lower exports from Russia and as attacks by the Houthis on ships in the Red Sea raised concerns of oil supply disruption.


Gold price attracts some dip-buying on Monday amid a modest US Dollar downtick. Geopolitical tensions and looming recession risks also benefit the safe-haven metal. The prevalent risk-on environment could act as a headwind and cap any further gains.

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