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29.01.2024 Market Report


EUR/USD trades on the defensive below 1.0850 in Asian trading on Monday. The pair’s downbeat tone is supported by renewed US Dollar demand amid rising geopolitical tension in the Middle East. Investors stay unnerved ahead of a Big week. 


GBP/USD struggles for a firm near-term direction and oscillates in a familiar trading range. Reduced bets for an early BoE rate cut underpin the GBP and lend some support to the pair. Spot prices trade around the 1.2700 mark, nearly unchanged for the day.


The U.S. dollar inched lower on Friday, after data showed inflation rose modestly in December but was trending lower, which should keep the Federal Reserve on track to cut interest rates by the middle of the year. On early hours of Monday, the pair is trading at 147.50.


The AUD/USD pair remains capped under the 0.6600 mark during the early Asian session on Monday. The firmer US Dollar (USD) and higher US Treasury bond yields weigh on the AUD/USD pair. Investors await the Australian Consumer Price Index (CPI) data and the Federal Open Market Committee (FOMC) meeting this week for fresh impetus. The pair currently trades around 0.6573, down 0.11% on the day. 


The NZD/USD pair hovers around the 0.6100 mark during the Asian trading hours on Monday. The pair edges higher despite the stronger US Dollar Index (DXY). Investors await the Federal Open Market Committee (FOMC) meeting and the January US Nonfarm Payrolls this week for fresh impetus. At press time, NZD/USD is trading at 0.6107, adding 0.26% for the day. 


USD/CAD attempts to retrace its recent losses on risk aversion sentiment, improving to near 1.3450 during the Asian session on Monday. The Canadian Dollar (CAD) might have been experiencing difficulties following the Bank of Canada’s (BoC) choice to hold its benchmark interest rate at 5.0% on Wednesday, marking the fourth consecutive occasion of the central bank maintaining rates at the same level.


The USD/CHF continues to lose ground for the second straight session, edging lower to near 0.8640 during the Asian hours on Monday. The Swiss Franc (CHF) appears to be in demand against the US Dollar (USD), driven by an increase in risk aversion sentiment. This demand for the CHF could be attributed to heightened tensions in the Middle East, as geopolitical uncertainties often lead investors to seek safe-haven currencies like the Swiss Franc.


Oil prices climbed on Monday after a drone attack on U.S. forces in Jordan added to worries over supply disruption in the Middle East as Houthi rebels stepped up their attacks on vessels in the Red Sea, hitting a Trafigura-operated fuel tanker.


Gold is back in the green early Monday, having posted two straight weekly losses. XAU/USD price is staging a modest rebound, courtesy of the further escalation intensifying in the geopolitical tensions between the Middle East and the United States.

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