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23.06.2023 Market Report


The EUR/USD pair extends the overnight retracement slide from a six-week peak – levels just above the 1.1000 psychological mark – and drifts lower for the second successive day on Friday. The Fed’s hawkish outlook and the risk-off impulse, continue to underpin the safe-haven buck.


GBP/USD has shown a vertical fall to near the 1.2700 mark due to the risk-aversion theme in the early European morning. The pair is looking vulnerable ahead of the UK Retail Sales and Preliminary Manufacturing and Services PMI data. 


The US Dollar soared to fresh 2023 highs against the Japanese Yen on the widening divergence between the Fed and BOJ on interest rates. Overnight, the USD/JPY pair traded to 143.22, overnight and 7-month high before easing to settle at 143.12 (142.15 yesterday). Fed President Jerome Powell said he does not see rate cuts anytime soon. The benchmark 10-year yield climbed 7 basis points to 3.79%. The 2-year bond rate climbed to 4.79% (4.68%).


AUD/USD renews an intraday high at 0.6762 even as Australia’s S&P Global PMIs for June registered mixed data on early Friday. The reason could be linked to the US Dollar’s consolidation amid recently mixed comments from Federal Reserve (Fed) and Treasury officials. However, the broad recession woes and hawkish statements from Fed Chair Powell keep the Aussie bears hopeful.


The NZD/USD pair attracts fresh sellers following an early uptick to the 0.6190 region during the Asian session on Friday and turns lower for the second successive day. The pair drops to a fresh daily low, around the 0.6160 area in the last hour, albeit remains well within in a familir trading range held over the past three days. The US Dollar (USD) gains some follow-through traction on the last day of the week and looks to build on the overnight goodish rebound from its lowest level since May 11, which, in turn, is seen exerting some pressure on the NZD/USD pair. The Federal Reserve (Fed) Chair Jerome Powell, during his two-day congressional testimony, backed the case for more interest rate hikes, albeit at a “careful pace”. Powell added that the Fed doesn’t see rate cuts happening any time soon and is going to wait until it is confident that inflation is moving down to the 2% target. Apart from this, the prevalent cautious mood underpins the safe-haven Greenback and weighs on the risk-sensitive Kiwi.


USD/CAD prints a three-day losing streak around 1.3145, despite the latest inaction, as it prods the lowest levels since September 2022 amid Friday’s Asian session. In doing so, the Loonie pair struggles to justify the broad US Dollar strength, as well as the Oil price weakness, as markets await the preliminary readings of the US S&P Global PMI for June.


USD/CHF holds onto the previous day’s bullish bias while refreshing the intraday top near 0.8970 amid early Friday morning. In doing so, the Swiss Franc (CHF) pair portrays the failure to cheer the Swiss National Bank’s (SNB) rate hike as sour sentiment underpins the US Dollar.


Oil prices fell slightly in early Asian trade on Friday after a sharp tumble in the prior session as fears of rising interest rates and worsening economic conditions wiped out all gains made this week.


Gold price remains on the way to posting the biggest weekly loss since late January as the US Dollar cheers the market’s risk-off mood, as well as the hawkish Federal Reserve (Fed) concerns. Central banks bolster recession woes and underpin US Dollar run-up, weighing on XAU/USD.

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