In this article, we have covered the highlights of global market news about the EUR/USD, GBP/USD, AUD/USD and USD/CNH.
EUR/USD might go over last May’s high of 1.0785 – ING
Yesterday, EUR/USD was able to edge up to a new high. ING economists predict that the pair may attempt the peak from last May at 1.0785.
The high cost of natural gas might hurt the Euro later in the year. “At this point, assuming today’s US event risks permit, we would like to support further EUR/USD gain. This can cause the EUR/USD to test the 1.0785 high from last May.
If the US December CPI report on Thursday is another mild reading, there is an outside probability of 1.0950 this week.
“Before we revive the call to 1.15, we need to point up that a reopened China would compete for supplies of LNG throughout the world. This implies that the problem of high natural gas costs will likely hit the eurozone and the Euro later in the year.
GBP/USD continues under pressure at mid-1.2100s, despite some US Dollar gain ahead of Powell’s Fed speech.
Tuesday saw a slight decline in the GBP/USD pair, ending a two-day gaining run at a nearly three-week high. The pair remained on the defensive throughout the first half of the European trading day. It is now edging closer to the daily low in the mid-1.2100s.
The US Dollar is being helped by several reasons to make a minor comeback from the seven-month low it reached on Monday, which is then expected to put some downward pressure on the GBP/USD pair. A modest increase in US Treasury bond rates and a calming of risk sentiment support the revival of demand for the safe-haven dollar.
The euphoria sparked by China’s shift away from its stringent zero-COVID policy is overshadowed by concerns that the enormous influx of Chinese visitors may lead to a new outbreak of illnesses. In addition, the extended conflict between Russia and Ukraine has dampened investor confidence and fueled worries of a broader global economic slowdown.
In addition, the US Dollar increase may have been caused by some repositioning trading before Fed Chair Jerome Powell’s speech, which is scheduled to take place later during the early North American session. Investors will seek further clarification over the Fed’s rate rise trajectory, which will significantly impact the US Dollar and give the GBP/USD pair new momentum.
The AUD/USD is still stuck in a range around 0.6900, with Powell’s speech looming.
On Tuesday, the AUD/USD pair is neutral and consolidates recent gains to reach its highest point since late August, in the mid-0.6900s achieved the previous day. Through the first part of the European day, spot prices fluctuated between modest gains and losses, and they now seem to have settled close to the 0.6900 level.
The US Dollar is being helped by several reasons to halt its recent decline and recover some positive momentum, which is regarded as a headwind for the AUD/USD pair. A little increase in US Treasury bond rates aids in reviving demand for the US Dollar. In addition, the generally cautious market tone supports the safe-haven dollar even more and limits the gain for the risk-averse Australian dollar.
Investors are nevertheless concerned that the enormous influx of Chinese tourists may lead to a new wave of infections despite China’s shift away from its strict zero-COVID policy. Furthermore, the lengthy Russia-Ukraine conflict has heightened worries about a broader global economic slowdown. A softer tone around the equities markets shows how this, in turn, impacts the risk sentiment.
USD/CNH is likely to fall more in the short future – UOB
In the coming weeks, further declines might push the USD/CNH back to the 6.7000 area, according to economist Lee Sue Ann and market strategist Quek Ser Leang of the UOB Group.
The US Dollar might breach 6.8000, but it might not sustain a footing below this level, according to our 24-hour outlook. The following support is at 6.7700, as we said. The US dollar sank more than anticipated, falling to a low of 6.7665. Although oversold, the US Dollar fall may hit the critical support of 6.7500 before the likelihood of a more significant comeback rises. Therefore, it is doubtful that prices will continue to decrease below 6.7500. Resistance is found at 6.8000, then 6.8150.
Within the next three weeks: “Yesterday (9 January, spot at 6.8200), we suggested that the USD is likely to drop, but more gradually. Support levels are around 6.7700 and 6.7500, as we indicated. After that, the USD fell to a low of 6.7665. We still anticipate a decline in the value of the US dollar, and if it falls below 6.7500, attention will turn to 6.7000. Overall, a break of 6.8500 (the previous day’s “strong resistance” level was at 6.8800) would suggest that the USD is not losing further ground.
Please click here for the Market News Updates from 9 January, 2023.