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19.06.2023 Market Report


The EUR/USD pair is oscillating in a narrow range around 1.0940 in the late Asian session. The major currency pair is demonstrating a non-directional performance as the street is divided about the further roadmap of interest rate policy to be attempted by the Federal Reserve (Fed).


GBP/USD sellers prod intraday low of around 1.2810 heading into Monday’s London open, printing the first daily loss in five at the highest levels in 14 months. The British Pound (GBP) continues with its relative outperformance in the wake of expectations that the Bank of England (BoE) will continue with its policy tightening to stop inflation expectations from becoming entrenched. In fact, the BoE is universally anticipated to hike the benchmark rates by 25 bps on Thursday, to 4.75% or the highest since April 2008. Moreover, the markets are pricing in the possibility of a bigger, 50 bps lift-off, which, along with subdued US Dollar price action, acts as a tailwind for the GBP/USD pair.


The USD/JPY pair enters a bullish consolidation phase on Monday and oscillates in a narrow band below the 142.00 mark, or its highest level since November 2022 touched during the Asian session. The Japanese Yen (JPY) continues to be undermined by the Bank of Japan’s (BoJ) decision on Friday to leave its ultra-loose policy settings to support the fragile domestic economy. In fact, the Japanese central bank held its short-term interest rate target at -0.1% and made no changes to its yield curve control policy. The BoJ also kept intact its view that inflation will slow later this year, suggesting that it will remain a dovish outlier amid global uncertainty. This, in turn, is seen as a key factor acting as a tailwind for the USD/JPY pair on the first day of a new week.


The AUD/USD pair has shown a recovery move after a correction to near 0.6840 in the early European session. The Aussie asset has got strength as investors are awaiting the release of the Reserve Bank of Australia (RBA) minutes and the interest rate decision by the People’s Bank of China (PBoC).


The NZD/USD pair attracts some sellers near the 0.6235 region on Monday and extends its steady intraday descent through the Asian session, snapping a four-day winning streak. Spot prices retreat further from the monthly peak touched on Friday and drop to the 0.6200 round-figure mark, or a fresh daily low in the last hour. The US Dollar (USD) gains some positive traction for the second straight day in the wake of the Federal Reserve’s (Fed) hawkish outlook and turns out to be a key factor exerting some pressure on the NZD/USD pair.


USD/CAD picks up bids to consolidate the recent losses around the yearly low, refreshing the intraday top near 1.3215 amid early Monday. In doing so, the Loonie pair snaps a two-day downtrend while justifying the broad US Dollar recovery, as well as the downbeat prices of Canada’s main export item WTI crude oil, during a sluggish session due to the Juneteenth holiday in the US.


USD/CHF stays defensive around 0.8940-45, fading the previous day’s bounce of a five-week low, heading into Monday’s European session. In doing so, the Swiss Franc (CHF) pair portrays the market’s indecision amid the US Juneteenth holiday and cautious mood ahead of this week’s monetary policy meeting decision from the Swiss National Bank (SNB).


Oil prices fell in Asian trade on Monday as markets awaited more interest rate cuts from China, while U.S. monetary policy remained in focus before an upcoming testimony from Federal Reserve Chair Jerome Powell this week.


Gold price suffers from the market’s pessimism about China, as well as the fresh hawkish concerns for the Federal Reserve (Fed), as it takes offers to renew its intraday low near $1,954 during early Monday in Europe.

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