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18.10.2023 Market Report


EUR/USD is holding higher ground but remains below 1.0600 in the Asian session on Wednesday. The risk-on flows dominate and weigh on the US Dollar, especially in light of the upbeat Chinese data. Lagarde’s speech and EU/US data are in focus. 


GBP/USD trades in positive territory at around 1.2200 in the European morning on Wednesday. The data from the UK showed that the annual Consumer Price Index (CPI) inflation held steady at 6.7% n September, surpassing the market expectation of 6.5%. 


The USD/JPY pair remains confined in a narrow range around 149.75 during the early Asian trading hours on Wednesday. A surge in US Treasury bond yields underpinned the major pair. At nearly the 150.00 mark, investors remain on guard for the possibility of an intervention by Japanese authorities.


The AUD/USD pair snaps a two-day winning streak during the early Asian session on Wednesday. The pair faces some follow-through selling after reaching the 0.6380 area. AUD/USD currently trades near 0.6360, losing 0.07% on the day.
Early Wednesday, the Reserve Bank of Australia (RBA) Governor Michele Bullock said the central bank will respond with policy if inflation remains higher than expected. Bullock further stated they are a bit more worried about the inflation impact from supply shocks.


The NZD/USD pair attracts some buyers and holds above the 0.5900 area during the Asian session on Wednesday. The upbeat Chinese economic data lends some support to the Kiwi. The pair currently trades near 0.5905, gaining 0.13% for the day. The latest data from the National Bureau of Statistics of China on Wednesday revealed that China’s Gross Domestic Product (GDP) for the third quarter (Q3) climbed 1.3% QoQ from a 0.8% expansion in the previous reading, stronger than the expectation of 1%. On an annual basis, the growth number grew to 4.9% versus 6.3% prior, beating the estimation of 4.4%.


The USD/CAD pair edges lower after retracing from the 1.3700 barrier during the Asian trading hours on Wednesday. A rally in oil prices and a softer US Dollar (USD) weigh on the pair. At the press time, USD/CAD is losing 0.10% on the day to trade at 1.3635.


In Tuesday’s session, the USD/CHF saw volatility, and after initially rising to a high above 0.9032, it retreated towards 0.9000, still holding some daily gains. The  market movers for the pair included US economic activity figures from September, while the Swiss economic calendar had nothing relevant to offer.


Oil prices surged on Wednesday as tension escalated in the Middle East after hundreds were killed in a blast at a Gaza hospital, sparking concerns about potential oil supply disruptions from the region.


Gold price is consolidating a sharp rally to fresh monthly highs above $1,940 in early Europe on Wednesday. Rising geopolitical tensions between Israel and Hamas and upbeat Chinese economic data boosted the demand for the bright metal. 

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